* NZD hits fresh three-year highs, eyes post-float peak
* Fitch changes outlook on NZ ratings to positive from
* Dollar continues to trim payrolls-inspired gains
* China inflation, Fed minutes and ECB's Draghi all on the
By Ian Chua
SYDNEY, July 9 The New Zealand dollar held on to
gains early on Wednesday, having scaled a fresh three-year peak
on the prospect of a sovereign rating upgrade, contrasting with
other major currencies which shuffled in familiar ranges.
The kiwi last traded at $0.8790, after rising as
far as $0.8806, bringing into focus its post-float high around
$0.8840 set in August 2011.
It broke above a $0.8714-0.8795 range seen in the past week
or so after Fitch revised its outlook on New Zealand's AA-rating
to positive from stable, citing progress in the country's fiscal
"This is a clear positive for the NZD in both the near and
medium-term," said Annette Beacher, head of Asia Pacific
research at TDSecurities.
"A shift to a positive outlook does not necessarily
guarantee a credit upgrade to AA+, but the odds have shifted
decisively in that favour."
To be sure, the kiwi has been supported by its yield
advantage, which is set to grow even bigger later in the month
when the Reserve Bank of New Zealand is likely to hike the 3.25
percent cash rate by another quarter point.
The U.S. dollar, meanwhile, nursed small losses after a fall
in Treasury yields tampered demand for the greenback. It has
lost roughly half of the gains made last Thursday on the back of
solid nonfarm payrolls.
"The price action thus far seems to be a reversal of moves
from last week following the strong jobs report," noted analysts
Against the yen, the greenback slipped to a near one-week
low of 101.48 yen, while the euro drifted up to $1.3612
. That saw the dollar index soften slightly to
The common currency also lost a bit of ground on the yen,
reaching one-week lows at 138.10.
The euro largely shrugged off remarks from European Central
Bank Executive Board member Sabine Lautenschlaeger that played
down the need for asset-buying stimulus.
Lautenschlaeger, a former Bundesbank vice president, said
the ECB should only embark on a broad asset-buying programme in
the event of an emergency, such as the immediate prospect of
Both sterling and the Canadian dollar continued to
consolidate recent gains, with the pound still not far from a
six-year high despite an unexpected slide in British industrial
Sterling bought $1.7130, while the loonie was at
C$1.0678 per U.S. dollar.
Overall, the session in New York was pedestrian and made
even more subdued with many eyes glued to the television for the
Germany-Brazil semi-final World Cup match that saw Germany
thrash Brazil 7-1.
That means another quiet start for Asia, at least until 0130
GMT when Chinese inflation data is released.
Any unexpected acceleration in price pressure will probably
be negative for risk appetite, giving the safe-haven yen a lift.
Later in the day, minutes of the Federal Reserve's latest
policy meeting and speeches by ECB officials, including
President Mario Draghi, will be closely watched.
(Editing by Eric Meijer)