Sharechat Logo

NZ dollar climbs month-high vs greenback

Wednesday 12th September 2012

Text too small?

The New Zealand dollar climbed to a month-high versus the greenback ahead of the Federal Reserve's two day policy meeting and after Moody's Investors Services threatened to strip the world's largest economy of its AAA credit rating.

The New Zealand dollar rose to 81.86 US cents at 8am in Wellington, the highest since Aug. 6, from 81 cents at 5pm yesterday. The trade weighted index increased to 72.78 from 72.36.

Rating agency Moody's warned it may cut the US credit rating one notice to Aa1 if the Federal government fails to rein in national debt. Standard & Poor's stripped the world's biggest economy of its AAA-rating in August last year after negotiations to raise its debt ceiling stalled.

That comes as the Federal Open Market Committee meets to review monetary policy in the US, and is tipped to announce a third round of quantitative easing and push out the timeframe for near-zero interest rates to 2015.

"It is fuel to the fire on expectations for further quantitative easing," said Stuart Ive, currency strategist at HiFX. "There is a strong possibility the Fed will do something - we'll see the kiwi go up against the US on that basis."

The kiwi "does appear to be trying to push its way up" with resistance coming in around 82.10 US cents and support at 81 cents, Ive said.

The New Zealand dollar also advanced after ratings agency Fitch Rating affirmed the country's AA rating and stable outlook, citing its "strong track record of monetary policy management, product fiscal management, high level of economic development and a strong governance and fiscal environment."

"Not only did Fitch affirm the rating but they expect a boost from the Christchurch rebuild," Ive said. "In times of global downturn New Zealand is still jugging away."

The New Zealand dollar was little changed at 63.54 euro cents from 63.42 cents ahead of Germany's Federal Constitutional Court ruling on the nation's participation in 500 billion euro European Stability Mechanism, a fund set up to help euro-zone member states lower their borrowing costs by providing cheap loans.

New Zealand's accommodation survey for July will be released by Statistics New Zealand this morning.

The New Zealand dollar was little changed at 78.31 Australian cents from 78.26 cents yesterday. The kiwi rose to 63.51 yen from 63.35 yen and advanced to 50.82 British pence from 50.59 pence.

BusinessDesk.co.nz



  General Finance Advertising    

Comments from our readers

No comments yet

Add your comment:
Your name:
Your email:
Not displayed to the public
Comment:
Comments to Sharechat go through an approval process. Comments which are defamatory, abusive or in some way deemed inappropriate will not be approved. It is allowable to use some form of non-de-plume for your name, however we recommend real email addresses are used. Comments from free email addresses such as Gmail, Yahoo, Hotmail, etc may not be approved.

Related News:

NZ dollar gains on G20 preference for growth
NZ dollar dips as Wellington CBD checked for quake damage
NZ dollar gains, bolstered by RBA minutes, strong dairy prices
NZ dollar falls after central bank says it may scale up currency intervention
NZ dollar gains before CPI, helped by dairy gains, rally on Wall Street
NZ dollar trades little changed as US budget talks bear down on deadline
NZ dollar falls with equities on view US to sail over fiscal cliff
NZ dollar weakens as fiscal cliff looms, long bets unwind
NZ dollar sinks to three-week low as equities fall, fiscal talks in focus
NZ dollar slips as fiscal cliff talks grind slower in Washington