Kiwi up ahead of US Fed talk
The New Zealand dollar rose against the greenback today, ahead of US Federal Reserve chairman Ben Bernanke's testimony at Washington tonight.
The kiwi recently traded at US79.95c, up from US79.77c in the morning.
It was at 72.40 on the Trade Weighted Index of major trading partners' currencies, up from 72.28. Westpac market strategist Imre Speizer said the kiwi rose during the afternoon and held on to its gains.
"It was probably driven more than anything by expectations of Ben Bernanke's testimony tonight. We don't know if he will provide any fresh easing signals or not but the market thinks he may do, and if he follows through we will probably see the market go even higher. If he disappoints, the market will fall.
"Much of the kiwi's fate rests on his direction."
Earlier in the day, figures were released showing annual inflation at a 13-year low of 1 per cent, pointing to an even later start to any official interest rate rises next year.
At 1 per cent, annual inflation is now at the bottom of the Reserve Bank's target band of 1 per cent to 3 per cent.
Low inflation will let the Reserve Bank keep official interest rates at extremely low levels, with the official cash rate expected to be on hold at 2.5 per cent until next year.
Falling milk, fruit and television prices and cheaper cell phone services helped lower inflation to just 0.3 per cent in the June quarter, Statistics New Zealand said.
Economists had expected June quarter inflation of 0.5 per cent, with the main surprise a lack of housing-related inflation.
On the crosses, the kiwi was at 77.59 Australian cents, down from A77.79c earlier. It posted gains against the Japanese yen, reaching 63.10 at 5pm from 62.88 yen earlier. The kiwi was at 51.04 pence, up from 50.99 pence. It rose to 65.04 euro cents from 64.96 euro cents.
Speizer expected the kiwi to trade between US79.50c and US80.50c overnight.