NZ dollar climbs above 69 US cents for first time in week as Fed minutes digested
By Jonathan Underhill
Nov. 24 (BusinessDesk) - The New Zealand dollar rose above 69 US cents for the first time in a week as traders digested
the range of views in the latest Federal Reserve minutes that showed some policymakers unconvinced that inflation is
rebounding.
The kiwi traded at 68.83 US cents as at 8am in Wellington, and earlier rose as high as 69.05 cents, from 68.76 cents
late yesterday. The trade-weighted index was at 72.51 from 72.53.
US banks were closed on Thursday for the Thanksgiving Day holiday and many Americans extend the break by taking the
Friday off as well, which has a subduing effect on financial markets. But that hasn't stopped traders elsewhere from
continuing to weigh the messages from the minutes and detecting an overall dovish tone and the US dollar index, having
climbed this week, has since retreated back to its levels at the start of the week.
"The FOMC’s minutes of its last meeting were interpreted as slightly dovish, seeing the USD come under pressure and US
Treasury yields nudge lower," Jason Wong, a currency strategist at Bank of New Zealand, said in a note. "A December rate
hike remained on track and 'nearly all' Fed officials reaffirmed support for gradual hikes. But there were some mixed
views on the inflation outlook including the comment that many officials observed that low inflation might reflect not
only transitory factors, but also the influence of developments that could prove more persistent."
Wong said the weaker US dollar "saw the NZD push higher, peaking at 0.6905 overnight where it met some resistance."
In New Zealand today, traders will be watching for October trade figures, which are expected to show the trade deficit
shrank to $760 million from $1.1 million.
"While local trade balance figures today may cause a little volatility, against a relatively quiet global backdrop due
to US holidays, it should be a generally quiet end to the week," Sharon Zollner, senior economist at ANZ Bank New
Zealand, said in a note.
The kiwi traded little changed at 58.09 euro cents from 58.16 cents yesterday after European manufacturing and services
indexes printed stronger than economists had expected, while concerns have abated that Germany will struggle to form a
workable coalition government.
The kiwi traded at 90.24 Australian cents from 90.29 cents yesterday. It rose to 51.73 British pence from 51.57 pence,
fell to 4.5283 yuan from 4.5328 yuan and traded at 76.55 yen from 76.53 yen.
(BusinessDesk)
ends