The New Zealand dollar failed to make up lost ground against the greenback today, after US Federal Reserve chairman Ben Bernanke's downbeat address to the Senate Banking Committee did not explicitly suggest upcoming monetary stimulus for the US economy.
The kiwi recently traded at US79.64c, down from US79.76c earlier. It was at 72.20 on the Trade Weighted Index against major trading partners' currencies, down from 72.32 earlier.
ASB chief economist Nick Tuffley said the kiwi had a quiet day after Bernanke's speech.
"We've seen the currency trading in a very tight range today. When Bernanke didn't explicitly mention quantitative easing it did knock the currency down around 30 points," Tuffley said.
"Later when he mentioned inflation was relatively low and there was a modest risk of deflation, that seemed to spark a few hopes he had not ruled quantitative easing out entirely. It did push the kiwi up briefly but it's just drifted back a little bit."
The US Fed has bought US$2.3 trillion ($2.9 trillion) in government and mortgage-related debt to push long-term interest rates lower and support the economy.
On the crosses, the kiwi recently traded at 77.23 Australian cents, down from A77.38c earlier. It at 64.81 euro cents, down from 64.95 euro cents earlier.
Against the Japanese yen it was at 62.95, down from 63.06 yen earlier. It fell to 50.88 pence from 51 pence in the morning.
Tuffley said equity market movement was likely to be the key driver for the kiwi overnight.
- © Fairfax NZ News