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Little change for NZ dollar

The New Zealand dollar tagged along for the Australian dollar's short-lived bright moment against the greenback, but then dived away as investors considered the possibility recent declines of the United States currency were overdone.The highlight of last

NZPA
Mon, 18 Oct 2010

The New Zealand dollar tagged along for the Australian dollar's short-lived bright moment against the greenback, but then dived away as investors considered the possibility recent declines of the United States currency were overdone.

The highlight of last week's final trading session came around 1.20am on Saturday, when for a brief shining moment the Australian dollar reached parity with the US dollar for the first time since flotation in 1983.

The surge higher came after a speech by US Federal Reserve chairman Ben Bernanke, in which he said low inflation and high unemployment made a case for more easing. The aussie later retreated against the greenback to near session lows as investors debated the outlook for further gains.

At the same time as the aussie raced up, the NZ dollar was also flung higher, momentarily topping US76.15c, but then just as quickly falling away.

By 8am today the kiwi was buying US75.62c, slightly below the US75.70c at 5pm on Friday. The NZ dollar was also down against the Japanese currency, easing to 61.52 yen at 8am today from 61.62 yen.

Against the aussie, the NZ dollar was down to A76.15c from A76.34c at 5pm on Friday, while the kiwi edged up to 0.5401 euro from 0.5392. The trade weighted index was down to 66.83 at 8am today from 66.90 at 5pm on Friday.

Analysts said the US dollar was likely to stay on the defensive until a meeting of the Fed on November 2-3. But the downside may be limited, as much of the impact from additional Fed asset purchases had been priced into the market and bearish sentiment on the US dollar had reached extreme levels.

"The (US) dollar is somewhat oversold against a number of its key counterparts, but I don't really see much scope for sustained (US) dollar gains ahead of the Fed meeting in November," said Omer Esiner, chief market analyst at Commonwealth Foreign Exchange Inc in Washington.

NZPA
Mon, 18 Oct 2010
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Little change for NZ dollar
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