Kiwi rises on indications of recovery without price pressures

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The New Zealand dollar rose on indications the economy is finally gaining momentum without setting off inflation and after Federal Reserve chairman Ben Bernanke indicated quantitative easing to stimulate the US would continue throughout 2013.

The kiwi was at 83.94 US cents at 5.25pm, from 83.94 US cents at 8am and 84.02 US cents at 5pm on Monday, according to Reuters.

It spiked through 84 cents about 10am after the Quarterly Survey of Business Opinion indicated the economy surged in the December quarter and after another strong report the residential property market from the Real Estate Institute of New Zealand.

"We've been here before with various sentiment surveys and noted the failure of the economy to kick on," ANZ economists said.

The QSBO suggested the next move in the official cash rate was likely to be up, though benign readings on prices suggested it was some time away.

As traders absorbed the positive domestic news Mr Bernanke warned that the US was not out of the woods yet with respect to government finances.

Having avoided "fiscal cliff" policies that risked putting the economy into recession, politicians must still tackle the debt limit issue and spending.

The Fed last month opted to keep buying Treasury bonds and mortgage-backed securities to stimulate the economy, having held interest rates at near zero since December 2008.

But minutes from its December policy meeting released earlier this month showed a range of views about when bond purchases should end.

Mr Bernanke's latest comments were taken to confirm an extended period of so-called "QE3" is in prospect, which led to weakness for the US dollar in Asian markets.

The kiwi was at 62.91 euro from 62.71 euro and at 52.26 British pence from 52.00 yesterday. It was at 79.70 Australian cents from 79.62 cents.

The trade-weighted index was at 75.42 from 75.32.

BusinessDesk


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NZ Market Snapshot

Forex

Sym Price Change
USD 0.6345 -0.0113 -1.75%
AUD 0.9012 -0.0026 -0.29%
EUR 0.5639 -0.0124 -2.15%
GBP 0.4137 -0.0053 -1.26%
HKD 4.9164 -0.0892 -1.78%
JPY 76.1420 -2.1700 -2.77%

Commods

Commodity Price Change Time
Gold Index 1134.7 1.510 2015-08-31T00:
Oil Brent 54.1 -2.300 2015-08-31T00:
Oil Nymex 49.2 3.990 2015-08-31T00:
Silver Index 14.6 0.046 2015-08-31T00:

Indices

Symbol Open High Last %
NZX 50 5656.2 5664.2 5656.2 -0.02%
NASDAQ 4798.7 4824.6 4828.3 -1.07%
DAX 10201.0 10273.5 10298.5 -0.38%
DJI 16632.0 16632.0 16643.0 -0.69%
FTSE 6192.0 6247.9 6192.0 0.90%
HKSE 21692.8 21692.8 21670.6 -0.64%
NI225 18763.7 18777.5 18890.5 -2.12%