THE New Zealand Dollar began trading at around 1.974 to the British Pound on Monday 3 September, and around 1.244 against the US Dollar. From there a sharp decline against both currencies was witnessed, with a drop to 1.988 against the pound within the day’s trading.
A report from the USA detailing a contraction in the US manufacturing sector was cited as the reason for the drop off in the Kiwi’s value – with it and the Aussie Dollar retreating to one month lows against the USD. After the Reserve Bank of New Zealand later announced that its cash rate would remain unchanged at 2.5% until the year 2014, the Kiwi tumbled against most of its most traded currency partners.
However, further news out of the USA detailing a decline in the nation’s jobless rate for August then helped bolster the Australian and New Zealand currencies.
Late in the week, European Central Bank President Mario Draghi announced an unlimited debt-buying program for the region, which sent investors directly to emerging currencies.
Speaking in Frankfurt, Draghi sought to further calm investor sentiment, saying the programme “will enable us to address severe distortions in government bond markets which originate from, in particular, unfounded fears on the part of investors of the reversibility of the Euro”, reported Bloomberg.
By Friday the NZD had done well to recover the week’s significant losses, when it closed at around 1.970 against the Pound.
For the week ahead, investors will be looking forward to the Reserve Bank of New Zealand’s statement on monetary policy on Thursday.
GBP / NZD: 1.9718
EUR / NZD : 1.5751
USD / NZD : 1.2320
AUD / NZD : 1.2758
Exchange rates as of 08:06, 10 August 2012
Composed by Jesse Crooks of 1st Contact Forex
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