The New Zealand dollar fell out of favour with investors today after Federal Reserve chairman Ben Bernanke expressed concern about the US economy, but managed to rally off lows late in the session.Dr Bernanke, in testimony prepared for delivery to the Sen
The New Zealand dollar fell out of favour with investors today after Federal Reserve chairman Ben Bernanke expressed concern about the US economy, but managed to rally off lows late in the session.
Dr Bernanke, in testimony prepared for delivery to the Senate Banking Committee, said the US economy faced "unusually uncertain" prospects and that the central bank was ready to take further steps to bolster growth if needed.
While Dr Bernanke left the door open to additional stimulus steps, he said nothing would happen in the near term. The dollar slid against the yen and US equity prices fell.
The NZ dollar fell as low as 70.95USc today from 71.60USc at 5pm yesterday. It fell from around 71.80USc to 71.30c within about 10 minutes of Dr Benanke's comments but rallied late in the session to be 71.32USc at 5pm.
Dr Bernanke's official statement contained no surprises but the market was in a pessimistic mood and focused on the negatives, said Imre Speizer, senior market strategist at Westpac.
During a question and answer session Dr Bernanke outlined potential new stimulus measures and investors chose to worry that he was so explicit about possible measures.
Investors also remain nervous ahead of the release of stress-test reports by European banks and regulators at 4am NZ time on Saturday.
The NZ dollar also fell against the yen to be ¥61.64 at 5pm from Y62.65 yesterday.
It was €0.5580 from €0.5555 yesterday and was 81.31Ac from 81.16Ac yesterday.
The trade weighted index was 67.26 at 5pm from 67.31 yesterday.
