The New Zealand dollar claimed a four-year high against the Japanese Yen as Japan’s main opposition party, the Liberal Democratic Party, swept into power on pledges of increases fiscal and monetary stimulus.
ANZ Bank Foreign Exchange Manager Murray Hindley was cited as saying the Kiwi had been bolstered early by the strong gain in the New Zealand Dollar against the Yen in response to the Japanese election result but it has since trimmed its gains.
The Kiwi fell slightly in local trading as investor confidence began to wane as the Federal Reserve embarked on its fourth round of Quantitive Easing and the Bank of Japan is likely to follow suit. Investors are waiting for the Bank of Japans meeting later this week. Departing Bank of England Governor Mervyn King was cited as saying 2013 could be the year of the currency wars and that QE4 was probably enough to tip most of them over the edge.
Investors will remain cautious this week as they await the minutes of this month’s Reserve Bank of Australia board meeting on Tuesday, in which it is hoped an indication will be given as to whether the RBA will keep cutting rates next year. Investors are also closely watching the outcome of the US fiscal cliff negotiations.
Composed by Monique Chapman
Exchange rates as of 08:14, 17 December 2012
NZD/ GBP 0.5234
NZD/ EUR: 0.6430
NZD/ USD: 0.8463
NZD/ JPY: 70.6825
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