THE New Zealand Dollar started the week on a positive foot, tracking increases made by the Australian Dollar with gains against major currencies. These gains were however constrained as investor’s awaited news from the European meetings being held this week.
The expectations from RBNZ regarding inflation also kept the attention of the investors during local trade. “The decline in inflation expectations highlights the lack of urgency for the RBNZ to increase the OCR (official cash rate) over the coming year,” said ASB bank economist Jane Turner.
Tuesday saw the Kiwi take the lead over the Aussie, during local trading hours. The Kiwi was firmer against major currencies after a steady improvement in the Euro-Zone, with highs against the US Dollar ranging around $0.8140. All in all the day was relatively quiet as investors awaited news from the FOMC minutes, as well as the Chinese manufacturing and Euro-Zone meetings planned for Wednesday.
The Kiwi fell to a multi-week low against the Euro on Wednesday as investors were still wary about prospects in the Euro-Zone, although there were no solid developments made in the European debt plan. The Kiwi slowly weakened to $0.8080 against the US Dollar, from $0.8105 in late trade on Tuesday, although briefly reaching a one-week high of $0.8144 overnight.
The Kiwi rallied against the greenback on Thursday as risk was assumed by investors following increased speculation stimulus will be provided to the markets by the US Federal Reserve. The Kiwi succumbed to pressures in later trade and closed at $0.8125 against the Greenback. Local trade balance figures were scheduled to be released on Friday and they would be a key element to be watched on Friday.
Friday was a mixed session for the New Zealand Dollar as investors moved away from the Kiwi in early trade, resulting in the kiwi reaching a low of $0.8080 against its US Counterpart. Following the slow start to the morning, the Kiwi regained some ground and closed the day at 81 US cents.
NZD/ GBP: 0.5126
NZD/ EUR: 0.6475
NZD/ USD: 0.8109
NZD/ JPY: 63.7772
Exchange rates correct as of 09:08 on 27 August 2012
Composed by Ruth Laatz-Reineke
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