BUSINESSDESK: The New Zealand dollar fell from near a six-month high against the greenback as some traders took profits on a currency that jumped in the wake of the Federal Reserve's announcement of a third round of large-scale asset purchases.
The kiwi traded as high as 82.97 US cents, and was at 82.74 cents at 5pm from 82.86 cents at 8am. The trade weighted index was little changed on 73.08 from 73.10.
Risk assets such as the New Zealand dollar got a major boost last week after Fed chairman Ben Bernanke announced the central bank would expand its holdings of long-term securities with open-ended purchases of $US40 billion of mortgage debt a month.
Investors are now speculating more needs to be done to help fix the US economy after independent credit-research firm, Egan Jones cut the government debt rating to AA- from AA, saying the Fed's plans to stimulate the economy will likely hurt the economy not help it.
"The kiwi has been drifting lower throughout the day. There is a bit of profit taking following a strong finish after the Q3 announcement last week," says Dan Bell, currency strategist at HiFX. "The New Zealand dollar is pretty heavily positioned – it is starting to look over-stretched."
Four of the five analyst survey analysts surveyed by BusinessDesk expect the kiwi to finish the week higher amid speculation figures will show the local economy has continued to expand in the face of weaker global growth.
A Reuters' survey of 13 economists predicts Thursday's gross domestic product grew 0.3% in the second quarter, slowing from March's 1.1% pace.
The local currency was little changed after the Bank of New Zealand-Business NZ Performance Service Index showed the services sector stalled in August at 50 points from a revised 52.4 points in July. The decline was led by a fall in employment and activity and sales.
Today's Westpac McDermott Miller Consumer Confidence Index rose to 102.5 for the September quarter from 99.9 in June. A reading above 100 means optimists outnumbered pessimists.
Kiwi consumer confidence recovered in the June quarter, with households more willing to buy major household items even as they report a deterioration in their own financial circumstances.
The New Zealand dollar fell to 78.57 Australian cents from 78.84 cents last week. It traded at 63.01 euro cents from 64.04 cents, fell to 51.01 British pence from 51.49 pence and traded at 64.81 yen from 64.75 yen.
This article is tagged with the following keywords. Find out more about MyNBR Tags
Most listened to
- Sky TV boss John Fellet says he's happy to sign a contract with Spark
- NZ Shareholders Association chairman John Hawkins says all shareholders should question rising executive pay
- Hobson Wealth’s James Grigor on how Air NZ can deal to competition
- Westpac's Sarah Drought says the usually dry Summer months have feared will for dairy farmers, due to a wet Spring
- Summerset's Julian Cook discusses his growth plans