Kiwi holds gains against greenback ahead of Bernanke testimony
It traded at 81.82 US cents at 5pm in Wellington from 81.70 cents at 8am, up from 81.20 cents yesterday.
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The New Zealand dollar held gains against the greenback in local trading as investors pondered whether Federal Reserve chairman Ben Bernanke will give any hint of unwinding his money printing programme this year.
The kiwi traded at 81.82 US cents at 5pm in Wellington from 81.70 cents at 8am, up from 81.20 cents yesterday. The trade-weighted index advanced to 77.10 from 76.65 yesterday.
The Dollar Index, a measure of the greenback against a basket of currencies, has cooled from near a three-year high last week as investors shed some confidence the Fed will start rolling back its quantitative easing programme this year.
Traders are awaiting Mr Bernanke's testimony in front of a House of Representatives committee on Wednesday in Washington, which may be more cautious about tapering off the programme than other Fed officials.
"We've had a big run up in the US dollar, a small reversal, and now it's 'wait and see' for Bernanke," says Imre Speizer, market strategist at Westpac Banking Corp in Auckland.
If Mr Bernanke talks down the chance of unwinding QE, or even if he says nothing and sticks to the status quo, the kiwi "could get a look at 82.50, but I'm not looking at anything beyond that".
New Zealand financial institutions have wound back their expectations for local inflation to the slowest pace since June 1999 at 1.52 percent for the coming year, down from 1.68 percent three months ago.
Mr Speizer says that is in line with market expectations, with little reaction in the kiwi dollar.
Statistics New Zealand figures showed the number of New Zealanders leaving the country for Australia slowed to its smallest monthly deficit in almost three years last month, with inbound migration up overall.
Minutes to the Reserve Bank of Australia's monetary policy meeting this month showed the central bank still has an easing bias and decided to cut rates to stoke business investment being hindered by the strong currency.
The kiwi rose to 83.40 Australian cents at 5pm in Wellington from 83.01 cents yesterday. It gained to 83.82 yen from 83.39 yen yesterday, advanced to 63.47 euro cents from 63.21 cents and strengthened to 53.66 British pence from 53.11 pence yesterday.
(BusinessDesk)
Paul McBeth
Wed, 11 Jul 2018
Wed, 11 Jul 2018
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Kiwi holds gains against greenback ahead of Bernanke testimony
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