NZ dollar little changed after night with little direction

NZPA

Thursday 25th August 2011

The New Zealand dollar was little changed against the greenback after the overnight session as global risk sentiment improved at the same time as the US dollar strengthened.

At 8am the kiwi was buying US82.79c, slightly down from US82.92c at 5pm yesterday.

The United States dollar rose against major currencies as investors trimmed bets against the US currency on concerns the Federal Reserve may not signal new stimulus for the economy this week.

Investors have been betting Fed chairman Ben Bernanke will announce a new stimulus package in a speech late this week at Jackson Hole, but as the speech draws closer market participants are becoming uneasy about what, if anything, will be revealed.

Meanwhile, a surge in US July orders for long-lasting durable goods eased some fear about the US economy.

The yen weakened against the greenback after Japan unveiled new steps to curb its currency's strength and after Moody's downgraded the country's sovereign debt.

The NZ dollar edged higher to 63.75 yen at 8am from 63.57 at 5pm, while edging lower to 0.5742 euro.

BNZ currency strategist Mike Burrowes said the NZ dollar traded in a tight range against the greenback overnight without direction.

The kiwi was torn between rallying on an improvement in global risk sentiment versus falling against a stronger US dollar.

Trading on the NZ dollar against the euro had been directionless, while the Japanese action to weaken the yen helped the kiwi recover against that currency, Mr Burrowes said.

Against the Australian dollar, the kiwi was marginally higher at A79.04c at 8am, while the trade weighted index was 71.06 at 8am from 71.10 at 5pm.

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