NZ Dollar holds near 3mth high ahead of Fed meeting

Tuesday 24th January 2012

The New Zealand dollar hit a three month high against the greenback in local trading, ahead of the Federal Reserve’s two-day meeting where policymakers will provide a first-time forecast for benchmark interest rates.

The New Zealand dollar rose as high as 81.42 US cents during the day and traded at 80.86 cents at 5pm, down from 80.97 cents at 8.30 a.m. It was little changed on 62.25 euro cents from 62.23 cents this morning.

US Federal Reserve policymakers will meet for the first time this year, with the Federal Open Market Committee releasing its monetary policy statement on tomorrow. The Fed is expected to continue pursuing a near-zero interest policy, and will include Federal funds rate forecasts for the first time.

“I don’t think there will be any major surprises. Everything has already been priced into the market,” said Chris Weston, market strategist at IG Markets.

“We are seeing early signs of an improvement so the announcement will not rock the boat too much. “The Fed won’t be reporting what they are going to do, just the path they are going to follow,” Weston said.

In New Zealand, it is a data-heavy end to the week, with the Reserve Bank credit card spending for December set for release tomorrow, the Official Cash Rate review on Thursday, followed by the BNZ-Business NZ Performance of Manufacturing Index on Thursday afternoon, and December balance of trade statistics on Friday.

The New Zealand dollar gained to 77.10 Australian cents from 46.85 cents this morning. It fell to 62.26 yen from 62.34 yen. The kiwi was unchanged on 52.03 British Pence. The trade-weighted index rose slightly to 71.67 from 71.65.

(BusinessDesk)

BusinessDesk.co.nz

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