Thursday 11th July 2013
|Text too small?|
The New Zealand dollar rose above 79 US cents for the first time in three weeks after US Federal Reserve chairman Ben Bernanke talked down the prospect of unwinding his money printing programme, sparking a sell-off in the greenback.
The kiwi climbed to 79.52 US cents at 5pm in Wellington from 77.96 cents at 8am and 78.51 cents yesterday. The trade-weighted index fell to 75.10 from 75.40.
The US economy still needs "highly accommodative monetary policy for the foreseeable future," Bernanke said in a Q&A session after a speech in Cambridge, Massachusetts. That eroded expectations the Fed will start pulling back its US$85 billion monthly asset purchase programme as early as September. The US dollar index, a measure of the greenback against a basket of currencies, dropped 1.8 percent to 82.50.
"They're talking about tapering, but that doesn't mean it's going to happen," said Tim Kelleher, head of institutional FX sales NZ at ASB Institutional NZ. "We could see some quite violent moves in the currency, and we could see it back to 82/83 US cents."
The local currency touched 12-month lows against the greenback earlier this month as traders started preparing for the Fed to start tapering its quantitative easing programme, and Kelleher said it could retrace some of those losses for two or three months.
New Zealand's manufacturing sector continued to expand last month, though at a slower pace than its nine-year high in May, according to the BNZ-BusinessNZ performance of manufacturing index, while government figures showed food prices rose in June at their fastest pace since October 2010, the month when the government hiked the goods and services tax to 15 percent from 12.5 percent.
The kiwi dollar increased to 85.644 Australian cents from 85.49 cents yesterday and slid to 78.50 yen from 79 yen yesterday. It to 60.55 euro cents from 61.43 cents yesterday and declined to 52.48 British pence from 52.75 pence.
No comments yet
NZ dollar headed for 1.3% weekly gain on expectations of a Fed rate cut
RBNZ knock-back gives Resolution chance to low-ball AMP - Jarden
Rail hubs may not boost Napier Port log trade
O'Connor looks to overhaul Biosecurity Act, improve animal tracing
Denton Morrell undefended at liquidation hearing
Contact steam to heat Norske Skog pellet business secured
Air NZ to amend booking engine after lawyer’s complaint
Ross McEwan to take helm at NAB
KPMG says bank capital proposals will wreck havoc on dairy farmers
Mild weather saps Vector's June-qtr volumes