The New Zealand dollar may post losses due to market instability caused by investor fears over the looming violence in Iraq.
The kiwi remained slightly unchanged at 86.68 US cents at the opening of Monday trading in Wellington. The currency had closed at 86.61 cents in New York on Friday and 86.66 cents in Wellington. The trade-weighted index rose to 80.79 from Friday’s 80.68.
The Brent crude advanced to a nine-month high on Friday after the Iraq government led by Prime Minister Nouri al-Maliki launched an offensive to recover territories seized by al-Qaeda insurgents, the Islamic State in Iraq and the Levant (ISIL).
The insurgency, which cast doubts over whether al-Maliki can unify Iraq, also threatens to affect output in the OPEC’s second-largest oil producer. A US aircraft carrier, USS George, has been dispatched to the Persian Gulf as President Barack Obama considers plans to assist al-Maliki to fight the rebels.
“We are in for a rough few days with the Iraqi situation,” Martin Rudings, a senior advisor at OMF, told Television New Zealand.”It’s a quiet start but people will be looking at the newswires and waiting for any headlines on any skirmishes that start there or any move in by the US. The kiwi is probably vulnerable to some volatility on the downside.”
The New Zealand dollar also held firm at 64 euro cents from Friday’s close of 63.92 euro cents. It also remained slightly unchanged at 92.21 Australian cents from Friday’s close of 91.99 cents; at 51.04 British pence from 51.09 pence and at 88.42 yen from last week’s close of 88.31 yen
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