NZ dollar little changed ahead of Jackson Hole meeting of central bankers
By Jason Krupp
Aug. 25 (BusinessDesk) - The New Zealand dollar was little changed amid heightened investor nervousness ahead of the
central bankers' summit at Jackson Hole on Friday.
The New Zealand dollar recently traded at 83.80 U.S. cents, up from 83.73 cents yesterday, and rose to 71.04 on the
trade-weighted index of major trading partners' currencies from 71.01 previously.
Central bankers from around the world are heading to their annual meeting at Jackson Hole in Wyoming, U.S.A., where
Federal Reserve chairman Ben Bernanke is expected to drop hints at a third round of quantitative easing. The major
impediment to a third round of asset buying is U.S. inflation, with both consumer and core inflation almost double what
they were a year ago when the Fed first floated the idea of QE2.That damped gains on equity markets in New York and
Europe, which showed signs of improved investor sentiment.
On Wall Street, the Standard & Poor's 500 Index rose 1.3% to 1,177.54, and Europe's Stoxx 600 closed 1.4% higher at 229.79. Gold prices tumbled, with
the precious metal recently trading at US$1,749.89 an ounce, down from historic highs of US$1,900 earlier in the week.
Yields on 10 year U.S. Treasury Bills rose to 2.28% from 2.11% previously, and commodities fell 0.8% to 331.59 as
measured by the 19-commodity Thompson Reuters Jefferies CRB Index.
"One gets the distinct feeling that we are treading water ahead of Fed chair Ben Bernanke’s Jackson Hole speech," said
Alex Sinton, a senior dealer at ANZ New Zealand. "Expect the New Zealand dollar to consolidate around current levels in
the lead up to news from Jackson Hole."
On the crosses, the New Zealand dollar recently traded at 79.02 Australian cents, down from 79.12 cents yesterday, and
rose to 63.71 Japanese yen from 63.40 yen previously. It declined to 57.36 euro cents from 57.46 cents yesterday, and
climbed to 50.53 pence from 50.21 pence previously.
Sinton said the kiwi dollar may trade between a range of 82.40 U.S. cents and 83.10 cents.
(BusinessDesk)