By: Barbara Zigah
The N.Z. Dollar surged to a new 3-month peak in Asian trading today, with the Kiwi expected to rise higher still, as investors celebrate the Greek acceptance of the emergency debt package recommended as a result of the joint collaboration of the European Union and the International Monetary Fund. As reported earlier today, against the U.S. Dollar the Kiwi struck $0.7202, the highest trade since late January, before edging back to $0.7912. The N.Z. Dollar was also boosted by the prediction that New Zealand mega dairy producer Fonterra will raise payouts to farmers tomorrow.
New Zealand economists primarily forecast that the New Zealand Reserve Bank will keep the Official Cash Rate at the current level, but suggest that Thursday’s statement may have a more hawkish tone, indicating that the removal of some stimulus measures may begin midyear.
Market players and analysts alike are keen to see how the London markets react to the Greek package, as according to them the Asian market response was somewhat lackluster. Skeptics suggest that the Greek rescue package may not be as effective as hoped for, given that the presence of the IMF in the deal will likely force austerity measures – some quite harsh – on the Greek population.