Kiwi Fluctuates, Can Become Stronger on Current Account

The New Zealand dollar fluctuated today after it rose yesterday as the nation’s current account deficit shrank more that was predicted by economists.

The New Zealand current account deficit (seasonally adjusted) decreased by $1.1 billion from the fourth quarter of 2010 to $1.8 billion in the first three month of 2011. The net international liabilities fell by $10.4 billion from Q4 2010 to $148.2 billion in March quarter of 2011.

The kiwi, as the New Zealand currency is commonly nicknamed, fluctuated against the greenback and the yen and gained versus the euro. The currency can gain as the Greek Prime Minister won a confidence vote, weakening risk aversion sentiment on markets. On the other hand, trades can be sluggish today as market participants will likely be reluctant to actively trade ahead of the important monetary policy decision by the US Federal Reserve today. The Fed is expected to keep maintain stimulus.

EUR/NZD fell from 1.7718 to 17670 today as of 3:12 GMT after rising to 1.7751. NZD/USD traded near its opening level of 0.81223 and NZD/JPY was flat at 65.15.

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