Kiwi around US80c as local market opens after Easter

Tuesday 26th April 2011

The New Zealand dollar was around the US80c level when the local market opened after the Easter break, having hit a three-year peak around US80.35c on Thursday evening.

ANZ bank said that while the NZ dollar had briefly been above resistance at US80.25c during Easter weekend trading, it had lost its sparkle as commodity prices reversed highs.

Key events this week will include central bank announcements in this country and the United States.

The Reserve Bank is widely expected to leave the New Zealand official cash rate at 2.5% on Thursday, while globally the key event risk of the week is the Federal Open Market Committee meeting in the US.

Market participants will look to the post-meeting news conference by US Federal Reserve chairman Ben Bernanke - the first regularly scheduled news briefing by a Fed chief in the US central bank's 97-year history - to see how the Fed plans to exit from its ultra-loose policy.

Overnight, the euro rose against the US dollar in a volatile but illiquid session with investors reluctant to make large bets in case the Fed shows no sign of changing its easy monetary policy.

The NZ dollar was buying 0.5487 euro at 8am today, little changed from its level at 5pm on Thursday, while edging up to A74.63c at 8am today from A74.45c at 5pm on Thursday.

The kiwi dropped to 65.35 yen at 8am today from 65.80 at 5pm on Thursday, with the trade weighted index down to 68.70 from 68.79.

NZPA

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