Dollar gains after Fed minutes show concern at greenback strength
The tone of the minutes was somewhat more dovish than some market participants had expected.
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The dollar rose after minutes of the US Federal Reserve's latest meeting showed concern that a strong greenback could hurt the US economy while some comments appeared to downplay any near-term inflation risks.
The kiwi rose to 71.79USc at 8am in Wellington from 71.64UCc late yesterday. The trade-weighted index edged up to 78.15 from 78.07.
Minutes of the Federal Open Market Committee's latest meeting showed officials saw the need to raise interest rates "fairly soon" provided labour market data and inflation were in line or stronger than expectations or there was a risk of overshoot.
The tone of the minutes was somewhat more dovish than some market participants had expected, especially given recent comments from chairwoman Janet Yellen and other Fed officials that indicated a rate hike in March was possible.
"US data is likely to provide most of the swings in the near term but the underlying story of an outperforming, stable New Zealand economy continues to support the currency," Sharon Zollner, senior economist at ANZ Bank New Zealand, said before the release of the minutes at 8am.
The kiwi actually extended its gains after following an announcement from Fonterra that it was maintaining its milk payout forecast at $6 per kilogram of milk solids. Some forecasters had been expecting an increase.
The kiwi traded at 93.22Ac from 93.14Ac. It rose to 57.64 British pence from 57.33 pence and traded at 68€c from 67.94€c. The kiwi fell to 81.20 yen from 81.29 yen and rose to 4.9421 yuan from 4.9295 yuan.
(BusinessDesk)
Jonathan Underhill
Thu, 23 Feb 2017
Thu, 23 Feb 2017
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Dollar gains after Fed minutes show concern at greenback strength
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