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NZD up ahead of FOMC meeting

JAZIAL CROSSLEY
Last updated 17:51 01/08/2012

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The New Zealand dollar was up against the greenback today, ahead of the two day Federal Open Markets Committee meeting that starts tomorrow morning our time.

The kiwi recently traded at US81.08c, up from US80.97c in the morning.

On the Trade Weighted Index against major trading partners' currencies it was at 72.90, up from 72.88.

ASB Institutional head of Institutional FX sales Tim Kelleher said the range the kiwi traded in did not show a great deal of activity today, but the currency started to rally again on the crosses against the Australian dollar.

It recently traded at 77.26 Australian cents, up from A76.98c in the morning.

"On the day today the kiwi held up with a bit of selling on the aussie, probably because of talks in the commodity market of Rio Tinto laying off staff in Australia.

"There are still offshore buyers though, so there will be demand regardless of dips if the commodity story continues," Kelleher said.

"The bigger focus tomorrow morning is the Federal Open Markets Committee meeting at 6.15am our time. The market is hoping the US will come out with more quantitative easing, but a lot of it is priced in already.

"It is really hard to call if it will have any real effect, we may just see some profit taking."

On the crosses, the kiwi was at 63.27 Japanese yen, down slightly from 63.29 yen earlier.

The kiwi was at 65.93 euro cents, up from 65.77 euro cents earlier. It rose to 51.75 pence, up from 51.63 pence earlier.

Kelleher said that up until the Federal Open Markets Committee meeting in New York, the kiwi could trade between US80.75c and US81.30c then it would be "a lottery" depending on the outcome.

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- BusinessDay.co.nz

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