WELLINGTON: The New Zealand dollar drifted up from a five-year low on Wesnesday, taking heart from gains in Asian stocks as investors took the news of Greece’s default on an IMF loan in stride.
As expected, Athens was unable to make a scheduled 1.6 billion euro loan repayment to the lender after last-minute overtures to international creditors failed to break a deadlock.
The fate of Greece’s membership in the 19-nation currency bloc hangs in the balance ahead of a referendum on Sunday when Greek citizens will vote on whether to accept the austerity terms of continued international aid.
“It’s no surprise Greece failed to meet the International Monetary Fund loan payment and requested an extension. Traders are now shifting focus to this weekend’s referendum,” said Stephen Innes, a senior trader at FX/CFD firm OANDA Australia and Asia Pacific.
The kiwi dollar rose 0.4 percent to $0.6796, pulling away from a five-year low of $0.6748 touched overnight.
Near-term support is the overnight low, with $0.6850 capping the topside. The next test for the currency is dairy giant Fonterra’s auction due early Thursday local time.
