Australian And New Zealand Dollars Extend Decline Against Most Majors
May 14 2012 - 5:13AM
RTTF2
In early European deals on Monday, the Australian and New
Zealand dollars are extending their previous session's slide
against most major currencies on growing concerns about the
Eurozone debt crisis.
Risk aversion grew after Greece's political parties failed in
their latest efforts to form a coalition government and Chancellor
Angela Merkel's conservatives suffered a stinging defeat in the
North Rhine-Westphalia state elections on Sunday.
Greece appears to be heading towards fresh elections after the
far-left Syriza party indicated that it will not participate in
further negotiations aimed at forming a coalition government in the
wake of last week's indecisive elections.
Syriza party leader Alexis Tsipras reportedly insisted that his
party will not participate in coalition negotiations with other
Greek political parties that back earlier deals reached with the
troika of international creditors, namely the European Union,
European Central Bank (ECB) and the International Monetary Fund
(IMF), in exchange for bailout loans.
With the Syriza opting to stay away from the negotiations, the
center-right New Democracy, the socialist Pasok as well as the
Democratic Left, a more moderate leftist party, are expected to
attend the talks at the presidential mansion to try and form a
coalition government to avoid fresh elections that are expected to
be announced later this week.
Such a development would lead to weeks of uncertainty in the
eurozone over Greece's continued membership in the single currency
zone. At a meeting in Brussels later today, eurozone finance
ministers are likely to increase pressure on Greece to continue
with austerity and structural measures.
The New Zealand dollar is trading at a 10-day low of 1.6567
against the euro and a fresh 4-month low of 0.7769 against the US
dollar, compared to Friday's close of 1.6494 and 0.7831,
respectively. The next downside target level for the kiwi is seen
at 1.70 against the euro and 0.770 against the greenback.
Against the Japanese yen, the New Zealand dollar is trading at a
5-day low of 62.21. If the kiwi-yen pair weakens further, it will
fall below 62 level. At Friday's close, the kiwi-yen pair was
quoted at 62.60.
The Australian dollar also declined, hitting a 10-day low of
1.2920 against the euro and a 5-day low of 79.79 against the yen.
On the downside,the aussie may 1.30 target against the euro and
79.0 against the yen. The euro-aussie and the aussie-yen pairs were
worth 1.2897 and 80.12, respectively at Friday's close.
Meanwhile, the Australian dollar continued to fall below parity
against the U.S. dollar for the first time since December 2011.The
aussie-greenback pair is now trading at 0.9965 with 0.990 seen as
the next downside target level. The pair ended last week's trading
at 1.0024.
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