The New Zealand dollar pushed up against a broadly falling greenback as investors once again reassessed how much money the United States Federal Reserve was likely to commit to a second round of monetary stimulus when it meets next week.Investors are far
The New Zealand dollar pushed up against a broadly falling greenback as investors once again reassessed how much money the United States Federal Reserve was likely to commit to a second round of monetary stimulus when it meets next week.
Investors are far from certain about how much money the Fed will spend, with a New York Federal Reserve survey of dealers and investors including scenarios of up to $US1 trillion ($NZ1.33t), a figure larger than recent estimates.
That snapped a two-day US dollar rally, pushing the euro to the upper end of its recent broad range. The more money the US central bank effectively prints, the more it will reduce the appeal of US dollar-based assets.
At 8am the NZ dollar was buying US75.37c, from US74.80c at 5pm yesterday, as it continued to climb from a three-week low near US74c early yesterday.
The kiwi also climbed to a three-week high against the Australian dollar, peaking near A77.15c early today. At 8am the NZ dollar was at A77.07c from A76.58c at 5pm yesterday.
BNZ markets strategist Mike Jones said a widening in New Zealand interest rate differentials had helped underpin recent gains in the NZ dollar against the US and Australian dollars.
With the Reserve Bank yesterday reinforcing its tightening bias, as it left the official cash rate at 3 percent, he would not be surprised to see that trend continue.
ANZ said there had been evidence of solid support for the NZ dollar even before the OCR review yesterday.
Locally markets had shrugged off the OCR review, while offshore markets continued to see the interest rate differential as favourable, ANZ said.
The cross against the aussie had lifted on expectations of a more reserved Reserve Bank of Australia at next month's Australian cash rate review.
The NZ dollar was little changed at 0.5413 euro, while edging up to 61.12 yen at 8am from 60.99 at 5pm. The trade weighted index rose to 66.92 at 8am from 66.69 at 5pm.
