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NZ dollar rises as US dollar falls after Fed's move

The New Zealand dollar rose today as the US dollar eased against a range of currencies after the Federal Reserve opened the door for further quantitative easing.The Fed's move eclipsed New Zealand current account data for the June quarter today. The defic

NZPA
Wed, 22 Sep 2010

The New Zealand dollar rose today as the US dollar eased against a range of currencies after the Federal Reserve opened the door for further quantitative easing.

The Fed's move eclipsed New Zealand current account data for the June quarter today. The deficit was slightly wider than expected but not enough to move the NZ dollar.

The focus is turning to tomorrow's gross domestic report for the second quarter.

The NZ dollar was at 73.59USc at 5pm, up from 73.29USc at 8am from 72.77USc at 5pm yesterday. This is approaching the technical level of 74USc.

Imre Speizer, currency strategist at Westpac, said that if the NZ dollar was repelled at the 74USc level it will have a downward bias but if it breaks through the next target is 76USc.

The Federal Open Market Committee voted on Tuesday to continue to maintain interest rates at near zero levels. It did not announce more quantitative easing, but signalled it may be compelled to undertake further asset purchases by year's end.

"The committee will continue to monitor the economic outlook and financial developments and is prepared to provide additional accommodation if needed to support the economic recovery and to return inflation, over time, to levels consistent with its mandate," the Fed said.

Mr Speizer said the Fed statement meant it would print money if necessary and this weakened the US dollar.

"Kiwi is going up not so much because risk currencies are going up but that US dollar is being sold," he said.

The Australian dollar rose 95.64USc from 94.50USc yesterday and reached a two-year high today.

The NZ dollar has been around a five-month low against the Australian dollar, and was buying 76.94Ac at 5pm from 76.82Ac at 8am and 77.04Ac at 5pm yesterday.

The Australian dollar gained against the greenback after the Reserve Bank of Australia said interest rates were likely to rise to contain inflationary pressures from the mining sector.

The NZ dollar was at €0.5537 from €0.5557 yesterday. It was at ¥62.45 from ¥62.26 yesterday.

The trade weighted index was steady at 67.08 from 66.85.

NZPA
Wed, 22 Sep 2010
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NZ dollar rises as US dollar falls after Fed's move
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