NZ dollar rises on indications of recovery without price pre
NZ dollar rises on indications of recovery without price pressures
Jan 15 (BusinessDesk) - The New Zealand dollar rose on indications that the economy is finally gaining momentum without setting off inflation and after US Federal Reserve chairman Ben Bernanke indicated quantitative easing to stimulate the US economy would continue throughout 2013.
The kiwi was at 83.94 US cents at 5.25pm, from 83.94 US cents at 8am and 84.02 US cents at 5pm on Monday, according to Reuters.
It spiked through 84 cents about 10am after the Quarterly Survey of Business Opinion indicated the economy surged in the December quarter and after another strong report the residential property market from the Real Estate Institute of New Zealand.
"We've been here before with various sentiment surveys and noted the failure of the economy to kick on," ANZ economists said.
The QSBO suggested the next move in the official cash rate was likely to be up though benign readings on prices suggested it was some time away.
As traders absorbed the positive domestic news Bernanke warned that the US was not out of the woods yet with respect to government finances.
Having avoided "fiscal cliff" policies that risked putting the economy into recession politicians must still tackle the debt limit issue and spending.
The Fed last month opted to keep buying Treasury bonds and mortgage-backed securities to stimulate the economy, having held interest rates at near zero since December 2008.
But minutes from the Fed's December policy meeting released earlier this month showed a range of views about when bond purchases should end. Bernanke's latest comments were taken to confirm an extended period of so-called "QE3" is in prospect, which led to weakness for the US dollar in Asian markets.
The kiwi was at 62.91 euro from 62.71 euro and at 52.26 British pence from 52.00 on Monday.
Against the Australian dollar it was at 79.70 Australian cents from 79.62 cents on Monday.
The trade-weighted index was at 75.42 from 75.32.