NZ dollar gains as Yellen hints at slower Fed tapering
© All content copyright NBR. Do not reproduce in any form without permission, even if you have a paid subscription.
The New Zealand dollar gained in local trading after Federal Reserve chair-nominee Janet Yellen indicated the US central bank won’t back off its money printing programme until the world’s biggest economy and its labour market improve.
The kiwi climbed to 82.86 US cents at 5pm in Wellington from 82.55 cents from 82.32 cents yesterday. The trade-weighted index advanced to 77.43 from 77.07 yesterday.
In testimony prepared for her nomination hearing before the US Senate tomorrow, Yellen said the Fed has come a long way since the global financial crisis, “but has more work to do” and needs a “strong recovery” to reduce its reliance on unconventional monetary policy. The Fed has been buying US$85 billion of assets a month in an attempt to support the US economic and labour market recovery.
Yellen’s testimony overshadowed weak New Zealand retail sales data, which showed consumer spending was propped up by sales of cars and autoparts in the third quarter.
“Retail sales was disappointing for the third quarter, but that was overshadowed by comment from Janet Yellen, the nominee for the next Fed chair, basically pouring cold water on the likelihood Fed tapering in the near term,” said Michael Johnston, senior trader at HiFX in Auckland. “That pushed up the kiwi somewhat aggressively.”
Bank surveys today showed New Zealand manufacturing expanded at its fastest pace for an October month in six years, and consumer confidence was at its highest level since January 2010.
The kiwi climbed to 82.57 yen at 5pm in Wellington from 81.91 yen yesterday after Japanese government figures showed growth in the world’s third biggest economy rose at an annualised pace of 1.9 percent in the third quarter, slowing from a pace of 3.8 percent in the previous period.
New Zealand’s currency gained to 88.64 Australian cents from 88.40 cents yesterday after Australia’s Senate rejected the Liberal-National Coalition government’s proposal to raise the nation’s debt ceiling by A$500 billion, instead offering a lower increase of A$400 billion.
The kiwi gained to 61.52 euro cents from 61.22 cents yesterday, and slipped to 51.67 British pence from 51.80 pence.
(BusinessDesk)
Paul McBeth
Thu, 14 Nov 2013
Thu, 14 Nov 2013
© All content copyright NBR. Do not reproduce in any form without permission, even if you have a paid subscription.
Free News Alerts
Sign up to get the latest stories and insights delivered to your inbox – free, every day.
NZ dollar gains as Yellen hints at slower Fed tapering
33787