The New Zealand dollar is heading for a 1 percent weekly decline as investors stay glued to US economic data after the Federal Reserve put plans to taper its monetary stimulus programme on hold.
The New Zealand dollar is heading for a 1 percent weekly decline as investors stay glued to US economic data after the Federal Reserve put plans to taper its monetary stimulus programme on hold.
The kiwi traded at 82.90 US cents at 5pm in Wellington from 83.71 cents at the Monday open. It was up from 82.75 cents at 8am and 82.52 cents yesterday. The trade-weighted index rose to 77.30 from 76.89 yesterday, and is heading for a 0.8 percent decline from 77.90 at the start of the week.
A BusinessDesk survey of seven traders and strategists on Monday predicted the local currency would trade between 82 US cents and 84.80 cents this week. Four picked the currency to decline while two expected it to advance and one said it would be unchanged.
Investors are looking to the latest instalment of US political posturing next week when politicians will be asked to lift the federal debt ceiling again next month. The debt cap issue sent markets into turmoil earlier this year as partisan politics left traders wary about the ability of the world's biggest economy to execute fiscal policy.
US employment figures at the end of next week will also be watched closely, as investors look for signs of an economic recovery robust enough to spur the Fed to start unwinding its US$85 billion monthly asset purchases.
"It just shows how offshore-focused markets are. It's all about global developments," said Dan Bell, currency strategist at HiFX in Auckland. "The New Zealand dollar's consolidating with a bit of a downside bias after a big rally following the no-taper from the Fed."
The Reserve Bank of Australia will review its benchmark rate next week, and is expected to keep it on hold at 2.5 percent. Investors will be looking for signs as to whether Australia's central bank will cut rates again, though the economy has been showing small signs of life in recent weeks. The kiwi rose to 88.65 Australian cents from 88.08 cents yesterday.
The local currency gained to 81.80 yen at 5pm in Wellington from 81.52 yen yesterday, and advanced to 61.46 euro cents from 61.01 cents. It rose to 51.63 British pence from 51.32 pence yesterday.
(BusinessDesk)
