Kiwi extends decline as Fed’s view on tapering looms large
Investors await the official view on whether the US will start winding back its $US85 billion a month asset purchases this year.
The New Zealand dollar fell in local trading as investors await the Federal Reserve's official view on whether it will start winding back its $US85 billion a month asset purchases this year.
The kiwi fell to 79.87 US cents at 5pm in Wellington from 80.05 cents at 8am and 80.80 cents yesterday. The trade-weighted index declined to 74.06 from 74.78.
Investors are waiting for the Federal Open Market Committee to wrap up its two-day meeting reviewing monetary, when Fed chairman Ben Bernanke is expected to give the central bank's official view on growing expectations it will unwind its stimulus programme as early as this year.
"People are starting to think it's a safe bet we will have the magic keyword 'tapering' mentioned" at the Fed meeting on Thursday morning, NZ time, says Alex Hill, head of dealing at HiFX in Auckland. "The kiwi's just drifted off with a little more support for the US dollar."
It may trade between 78.80 US cents and 81.20 cents ahead of the Fed meeting as traders hold fire until they have a clear steer from the US central bank.
The kiwi fell to 83.87 Australian cents at 5pm in Wellington from 84.04 cents after minutes to the June 4 Reserve Bank of Australia meeting said the central bank has room to cut rates further. The Australian dollar fell to 95.19 US cents from 96.17 cents yesterday.
New Zealand's first-quarter balance of payments figures tomorrow are expected to show the current account deficit narrowed to $600 million in the first quarter from a gap of $3.26 billion three months earlier, according to a Reuters survey.
The kiwi declined to 75.72 yen from 76.51 yen,slid to 59.83 euro cents from 60.65 cents and sank to 50.87 British pence from 51.47 pence.
(BusinessDesk)
Paul McBeth
Wed, 11 Jul 2018
Wed, 11 Jul 2018
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Kiwi extends decline as Fed’s view on tapering looms large
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