NZ dollar rises above 82 US cts as QE3, German ruling on rescue fund loom; RBNZ in background
By Paul McBeth
Sept. 12 (BusinessDesk) - The New Zealand dollar rose above 82 US cents for the first time in a month as stock markets
across Asia rallied on optimism the Federal Reserve will start printing more money and the German courts will approve
the legality of a Europe-wide bailout fund.
The kiwi rose to 82.02 US cents at 5pm in Wellington from 81.86 cents at 8am and 81 cents yesterday. The trade-weighted
index advanced to 72.84 from 72.36 yesterday.
Equity markets across the Asia Pacific rallied today in anticipation US policymakers and the German judiciary will give
more credibility to efforts to shore up the global economy. Japan's Nikkei 225 index rose 1.6 percent in afternoon
trading, while Hong Kong's Hang Seng was up 0.8 percent and Australia's S/ASX 200 index rose 0.9 percent.
The Federal Open Market Committee will announce its monetary policy review on Thursday in Washington, and chairman Ben
Bernanke is tipped to unveil a third round of asset purchases while pushing out the timeframe for near-zero interest
rates, while Germany's Federal Constitutional Court is set to judge the legality of the nation taking part in the 500
billion euro European Stability Mechanism.
"The underlying fundamentals for the global economy continue to look pretty average," said Dan Bell, currency strategist
at HiFX in Auckland. "We might see a continuation of this kiwi upside over the next few days, but it's going to come
back down to Earth."
The local currency was supported in the Northern Hemisphere trading session after Moody's Investors Service warned the
US its Aaa credit rating was at risk if it didn't rein in its public debt, something that cost its AAA-rating with
Standard & Poor's last year when legislators failed to reach any meaningful compromise to lift the nation's debt ceiling.
New Zealand's AA credit rating was affirmed by Fitch Ratings on the strength of its sound fiscal and monetary policies.
That comes ahead of tomorrow's Reserve Bank of New Zealand meeting, where governor Alan Bollard is expected to keep the
benchmark interest rate at 2.5 percent.
The New Zealand dollar was little changed at 78.24 Australian cents from 78.26 cents yesterday, and climbed to 63.83 yen
from 63.35 yen. It advanced to 51.02 British pence from 50.59 pence yesterday, and gained to 63.71 euro cents from 63.42
cents.
(BusinessDesk)