NZ dollar holds above 81 US cts as markets look toward Jackson Hole summit
By Paul McBeth
Aug. 27 (BusinessDesk) - The New Zealand dollar held above 81 US cents as investors look toward the major speeches at this weekend's central bankers' retreat in Jackson Hole, Wyoming, where officials from the Federal Reserve and European Central Bank may firm up guidance on stimulus measures.
The kiwi traded at 81.06 US cents at 5pm in Wellington from 81.09 cents at 8am and 81.10 cents on Friday in New York. The trade-weighted index was unchanged at 72.86 from last week.
Central bank officials from around the world are preparing for the summit in Wyoming that kicks off on Friday, with Fed chairman Ben Bernanke delivering a speech that day, and ECB President Mario Draghi speaking on Saturday.
Investors are looking for any hint from Bernanke that the Fed will start printing money for a third time, while seeking guidance from Draghi about plans for the ECB to buy government bonds from heavily indebted European nations.
"That's going to be pretty hard to beat in terms of something to get the market's focus," said Chris Tennent-Brown, FX economist at Commonwealth Bank of Australia in Sydney. "The kiwi's probably going to trade in a bit of range this week" between 80 US cents and 82 cents, he said.
Traders were given mixed messages over the weekend, with Germany's Angela Merkel and France's Francois Hollande turning down Greece's pitch for more time to meet the terms of its multi-billion euro bail-out until the first official monitor report. At the same time, stocks on Wall Street rallied on reports of Bernanke saying there was scope for more action by the Fed to strengthen the recovery.
Reserve Bank of New Zealand Governor Alan Bollard will give a speech on Thursday on the global financial crisis and its lessons for governance in the finance sector, though Tennent-Brown isn't expecting him to take any major action or make any market-moving statements before he retires in October.
The kiwi dollar traded at 64.78 euro cents from 64.87 cents last week and slipped to 51.26 pence from 51.34 pence. It traded at 63.82 yen from 63.84 yen last week was little changed at 77.95 Australian cents from 78 cents.