NZ dollar efforts to move higher easily thwarted

NZPA

Friday 26th August 2011

Efforts by the New Zealand dollar to push higher made little progress as investors avoided risky trades amid speculation a keenly awaited speech by Federal Reserve chief Ben Bernanke will contain no new plans to stimulate the United States economy.

From US82.83c at 5pm yesterday, the kiwi pushed towards US83.30c but was unable to hang on to the gains and was back down to US82.67c by 8am today.

ANZ bank said the past trading day had been "extremely tame" for the NZ dollar. The kiwi attempted moving higher overnight but that was easily extinguished as equity market weakness kicked in.

ANZ predicted another day of sideways consolidation for the kiwi, ahead of the Fed's annual symposium in Jackson Hole, Wyoming, where Bernanke is to give his speech.

Fading expectations of more Fed easing are good for the US dollar and bad for stocks and risk appetite.

Some analysts still think Bernanke may signal the Fed is ready to act if necessary, which could help riskier currencies including the Australian and New Zealand dollars.

The NZ dollar did push up to 64.06 yen at 8am from 63.75 at 5pm, but was little changed at A79.21c against the aussie and at 0.5747 euro. The trade weighted index was 71.14 at 8am from 71.16 at 5pm.

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