US Fiscal Cliff dominates Kiwi Dollar movements

NEW ZEALAND DOLLAR REVIEW | Kiwi strengthens as the market reacts positively to the last minute deal in the US to avoid the Fiscal Cliff.




THE New Zealand Dollar began trading at around 1.9635 to the British Pound on Christmas Eve and around 1.2143 against the US Dollar. The Kiwi weakened against both currencies to end the 2012 calendar year at 1.9723 to the Pound and 1.2197 to the US Dollar. The Kiwi opened stronger on Wednesday the 2 January 2013 at 1.9517 to the Pound and 1.1959 to the US Dollar.

The Kiwi strengthened in the New Year as the market reacted positively to the US Congress’s last minute deal to avoid the so-called Fiscal Cliff. The bill seeks to shield the policy effects on the middle class by maintaining low tax rates while increasing the taxes on wealthy households.

The Kiwi also strengthened on positive news out of China as the December HSBC PMI data was reported at 51.5, the highest level since May 2012. This news combined with light liquidity over the festive season resulted in quick movements in the New Zealand Dollar.

The global market is hesitant about the appointment of Shino Abe as the new Japanese Prime Minister and his intention for government to play a more active role in the economy. The Kiwi will be largely sensitive to the announcements coming out of Japan in the next few months as possible intentions become reality.
Other news being released this week includes the German CPI on Wednesday and manufacturing data for the US.

Composed by Elizabeth Britz of 1st Contact Money Transfers

Exchange rates as of 08:23, 2 December 2012

GBP/NZD: 1.9488
EUR/NZD: 1.5859
USD/NZD: 1.1949
AUD/NZD: 1.2532

Note: The above exchange rates are based on “interbank” rates.  If you want to transfer money to New Zealand then please register/login or call us for a live dealing rate. Make use of a Rate Notifier to send you alerts when the New Zealand exchange rate reaches levels you are looking for.