Forexpros – The New Zealand dollar was lower against its U.S. counterpart on Tuesday, as markets remained jittery amid sustained worries over a series of downgrades in the euro zone in the last trading days of 2011.
NZD/USD hit 0.7728 during late Asian trade, the pair’s lowest since December 23; the pair subsequently consolidated at 0.7736, declining 0.09%.
The pair was likely to find support at 0.7665, the low of December 22 and short term resistance at 0.7774, the high of December 21.
Trading volumes were low, resulting in subdued trade as many investors were already away on year-end leave, resulting in subdued trade.
The risk-related kiwi came under pressure as Standard & Poor’s was yet to announce if it will cut ratings on any of the 15 countries it has on credit watch negative.
Two independent European government sources said Friday that S&P was not expected to release its verdict on euro zone debt ratings until January.
Investors were also cautious amid signs of an economic slowdown in China, as the country’s company profit growth cooled in 2011.
Meanwhile, sentiment remained supported after government data showed Friday that U.S. new home sales rose to a seven-month high in November, while durable goods orders rose a better-than-expected 3.8% in November from October.
Both reports came amid a week marked by bullish U.S. economic indicators, including a report showing that initial jobless claims fell to the lowest level since April 2008.
Investors were also eyeing Italian three and ten-year bond auctions this week. The yield on Italy’s ten-year bonds topped the critical 7% threshold on Friday, adding to concerns over the handling of the country’s financial troubles.
The kiwi was fractionally higher against the Australian dollar with AUD/NZD edging down 0.02%, to trade at 1.3128.
Later in the day, the U.S. was to publish industry data on house price inflation, as well as a report on consumer confidence and manufacturing activity in Richmond.
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