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NZ Dollar Gains On Greenback After Fed Interest Rate Decision

Contributor:
Fuseworks Media
Fuseworks Media

Wellington, June 26 NZPA - The New Zealand dollar gained on the greenback after the Federal Reserve failed to give a strong enough signal that it would aggressively raise interest rates this year.

The kiwi rose quickly from around US75.55c shortly after 6am to peak at US75.95c, and by 8am it was buying US75.88c. That was slightly ahead of the US75.74c at 4.30pm yesterday.

The Fed held benchmark rates steady at 2 percent and expressed worries about upside risks to inflation. But it also said it expected price pressures to moderate this year.

While the NZ dollar was holding its ground against the US currency it fell against the Australian dollar to below A79c for the first time in more than 6-1/2 years.

A Westpac McDermott Miller quarterly survey released yesterday afternoon showed consumer confidence in this country, already at a decade low in the March quarter, plunging further in the June quarter to its lowest since the recession of 1991.

From A79.13c at 4.30pm yesterday, the kiwi briefly spiked down below the A79c level shortly before 5pm, and briefly dropped down below that level a few more times during the night. By 8am today the kiwi was back at A79.13c.

The NZ dollar also got down to the same level as a fortnight ago against the euro, around 0.4830, the lowest for about two years. At 8am the kiwi was buying 0.4841 euro, down from 0.4866 at 4.30pm.

Against the yen, the kiwi eased up overnight to 81.78 from 81.67. The trade weighted index was 67.76 at 8am from 67.82.

NZPA WGT Reuters mjd kn

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