Sharechat Logo

NZ dollar climbs to 3-week high after Bernanke talks down QE tapering

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.

  General Finance Advertising    

Comments from our readers

No comments yet

Add your comment:
Your name:
Your email:
Not displayed to the public
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:

MARKET CLOSE: Blue-chip stocks Meridian, A2 lead market lower
NZ dollar rises on Brexit hopes, rate cut reassessment
Three not failing, just needs a new owner - MediaWorks CEO
Major investors back new CBL class action targeting directors
Rip Curl purchase a done deal on Kathmandu proxies alone
Comvita chair Neil Craig eyes the exit once he finds a new CEO
Mercury raises guidance on increased storage, high spot prices
Eroad reports strong 3Q sales growth, eyes ASX listing
MediaWorks puts TV business on the block
NZ dollar benefits as preliminary Brexit deal improves risk appetite

IRG See IRG research reports