Kiwi falls amid renewed European fears

Written By Unknown on Selasa, 26 Februari 2013 | 12.21

THE New Zealand dollar fell against the greenback as the threat of a hung Italian parliament reignited fears Europe may be in for another sovereign debt scare.

The kiwi fell to 83.40 US cents at 5pm in Wellington from 83.62 cents at 8am, and 83.63 cents on Monday. It rose to 63.82 euro cents from 63.41 cents on Monday.

Uncertainty over the outcome of the first Italian election since the 2008 global financial crisis spooked investors, and prompted stocks across Asia to fall.

Early polling indicates the centre-left coalition committed to sitting Prime Minister Mario Monti's austerity programme has a small lead in the lower house, but would likely be hamstrung by a divided upper house.

"A picture of a new election being ordered, or an unstable coalition would both be bad for the kiwi," said Imre Speizer, market strategist at Westpac Banking.

"I wouldn't call it lower until we see a clear breakdown" of the 83 US cents level, he said.

The kiwi slipped to 81.15 Australian cents at 5pm in Wellington from 81.34 cents on Monday and to 76.81 yen from 78.65 yen.

The trade-weighted index fell to 76.28 from 76.57.


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