NZ dollar little changed as traders wait for more signs of US recovery
By Paul McBeth
Aug. 13 (BusinessDesk) - The New Zealand dollar was little changed as traders await more signs of an accelerating US economic recovery at a retreat for central bank governors.
The kiwi traded at 84.23 US cents at 5pm in Wellington from 84.36 cents at 8am, and 84.13 cents yesterday. The trade-weighted index was little changed at 79.04 from 78.99 yesterday.
The local currency bounced back from a two-month low yesterday after traders failed to break through a major resistance level at 84 US cents in thin trading. New Zealand relatively high interest rates have limited its decline over the past month, and investors are hoping to get firmer guidance on when the Federal Reserve will move away from running a zero interest rate policy at next week's central banker symposium in Jackson Hole, Wyoming.
"Some definitive guidance from Fed officials on whether rates will rise earlier rather than later, people want to see that," said Raiko Shareef, currency strategist at Bank of New Zealand in Wellington. "We really are in a holding pattern - we've had a really strong US dollar run into late July and early August, and that's petered out of late."
Weak Chinese credit figures weighed on the Shanghai Composite Index, which was down 0.6 percent in afternoon trading, though that didn't seep into currency markets, Shareef said.
Traders will continue to watch the tensions between Ukraine and Russia and their impact on market sentiment. Ukraine plans to block a Russian aid convoy unless certain conditions are met, fearing the 280 trucks may be carrying weapons to pro-Russian military separatists.
The local currency increased to 86.13 yen at 5pm in Wellington from 85.98 yen yesterday, and was little changed at 90.76 Australian cents from 90.82 cents. It edged up to 63.02 euro cents from 62.92 cents yesterday, and was little changed at 50.13 British pence from 50.20 pence.