THE New Zealand Dollar began last week’s trading around 1.9282 to the British Pound and around 1.1952 against the US Dollar. The Kiwi strengthened against both currencies to end the week at 1.9011 to the Pound and 1.1890 to the Dollar on Friday. The Kiwi opened trading this week at 1.8955 to the Pound and 1.1945 to the US Dollar.
Bank of Japan has agreed in a joint statement with government officials to raise the targeted inflation rate to 2 percent. The Bank of Japan was set to meet on Monday and again on Tuesday this week to discuss its monetary policy. The Kiwi will remain sensitive to further announcements out of this key Asian economy.
The House of Representatives in the US has signaled its intent to support a three month extension of the US debt ceiling. The likely debt ceiling increase is to be announced during the US trading period on Wednesday. The fight between the Republications and Obama will continue to create uncertainty around the US long term economic policies. The US Dollar continues to play a big role in the direction of the Kiwi.
The local consumer price index came in weaker than expected on Friday last week. The implied consequence of this index is that the local interest rate will remain unchanged. The market will look to Australia on Wednesday as they will announce their final quarter of 2012 inflation data.
Monday is a US bank holiday and is likely to cause a quiet day in the markets.
Composed by Elizabeth Britz
Exchange rates as of 08:39, 21 January 2013
EUR NZD: 1.5910
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