NZ dollar holds above 81 cents on Fed stimulus, European hopes
Aug. 27 (BusinessDesk) - The New Zealand dollar held above 81 US cents as traders look ahead to the week-end central bankers retreat in Jackson Hole, Wyoming, and await signs of commitment from European leaders for the European Central Bank’s bond buying plans.
The kiwi dollar traded at 81.09 US cents, from 81.10 cents in late New York trading on Friday. The trade-weighted index was at 72.85 from 72.86.
Federal Reserve chairman Ben Bernanke headlines the Jackson Hole retreat amid widespread speculation he will give further details of plans for further monetary easing, after minutes of the last Federal Open Market Committee meeting showed many members would support further stimulus.
The retreat comes at the end of a heavy week for US economic figures, with forecasts indicating improved performance for home prices, pending sales, consumer spending and revised economic growth.
“The July Fed minutes essentially put the market on notice for further easing,” said Mike Jones, a strategist at Bank of New Zealand. Still, “global cross winds at play” mean investors “are still a little unsure which way the global economy is going to break.”
The kiwi dollar traded at 64.80 euro cents from 64.87 cents after German Chancellor Angela Merkel reiterated her commitment to keeping the single currency intact.
The kiwi traded at 63.81 yen from 63.84 yen and edged down to 51.25 British pence from 51.34 pence. The kiwi slipped to 77.77 Australian cents from 78 cents.