NZ dollar rises as equities gain on prospects for QE3
By Jason Krupp
Aug. 23 (BusinessDesk) - The New Zealand dollar rose against the greenback, ahead of the release of the Reserve Bank's
household inflation expectations survey, as speculation for a third round of quantitative easing in the U.S. lifted
The New Zealand dollar recently traded at 82.58 U.S. cents, up from 82.11 cents yesterday, and rose to 71 on the
trade-weighted index of major trading partners' currencies from 70.49 previously.
Global equities rose as investors crept back into the markets following Friday's heavy selloff amid hopes that the
Federal Reserve chairman Ben Bernanke will announce a third round of asset buying when he addresses the central bankers'
summit at Jackson Hole on Friday. On Wall Street, the Standard & Poor's 500 Index rose 0.5% to 1,128.86 in afternoon trade, and Europe's Stoxx 600 closed 0.8% higher to 224.90.
Risk appetite still looked fragile with yields on 10 year U.S. Treasuries hovering near record lows at 2.09%, and gold
hitting a record high of US$1,893.91 an ounce before paring back to recently trade at US$1,889.50.
"Demand out of Europe was enough to ensure the kiwi steered clear of trouble and today it is far enough away from key
support levels to be able to comfortably look on the topside," said Alex Sinton, senior dealer at ANZ New Zealand.
"Troubles for world economies have not disappeared and thus further dips will come in the New Zealand dollar, just not
On the crosses, the New Zealand dollar recently traded at 79.12 Australian cents, up from 78.60 cents yesterday, and
rose to 63.40 Japanese yen from 62.92 yen previously. It gained to 57.46 euro cents from 56.98 cents yesterday, and
climbed to 50.09 pence from 49.77 pence previously.
The Australian cross rate will be in the spotlight today with the release of the Reserve Bank's inflation expectation
survey for the September quarter. A stronger print may see the kiwi climb back into the 79 Australian cent range, Sinton
The kiwi may trade between a range of 82.30 U.S. cents and 82.90 cents, he said.