Forexpros – The New Zealand dollar was higher against its U.S. counterpart on Wednesday, after reports of a potential agreement between France and Germany to enhance the euro zone’s bailout fund boosted demand for riskier assets.
NZD/USD hit 0.7997 during late Asian trade, the daily high; the pair subsequently consolidated at 0.7973, gaining 0.20%.
The pair was likely to find support at 0.7859, the low of October 18 and resistance at 0.8066, the high of October 17.
Risk sentiment strengthened on Tuesday after British newspaper The Guardian reported that France and Germany had made a deal to enhance the euro zone’s bailout fund by EUR2 trillion. The report was subsequently denied by European Union officials.
Concerns over the euro zone’s financial woes also eased ahead of the October 23 European summit, as German Chancellor Angela Merkel acknowledged that the meeting will “mark an important step” in solving the region’s debt crisis.
Earlier Wednesday, Moody’s Investors Service downgraded Spain’s credit rating for the third time since 2010, to A1 from Aa2, citing high levels of debt in the banking and corporate sectors.
Meanwhile, the kiwi was down against the Australian dollar with AUD/NZD rising 0.11%, to trade at 1.2911.
Later in the day, the U.S. was to release government data on building permits and consumer price inflation.
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