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NZ Dollar Reaches 3-Week High Vs Greenback

Contributor:
Fuseworks Media
Fuseworks Media

Wellington, June 25 NZPA - The New Zealand dollar climbed to a three-week high against the greenback, then its subsequent decline was given a push by the Federal Reserve's decision on United States interest rates.

The US dollar also extended gains against the euro and the yen after the Fed's Federal Open Market Committee (FOMC) left US interest rates unchanged as expected but removed the warning that inflation could be undesirably low.

The kiwi peaked around US64.85c about 1am, while it quickly lost half a cent after the Fed's decision around 6.15am. By 8am the NZ dollar was buying US64.03c, similar to the level at 5pm yesterday.

BNZ Capital senior strategist Danica Hampton said the US dollar had started the night on a softer footing, amid expectations the FOMC statement would hose down expectations of near-term rate hikes.

But the NZ dollar's strength against the greenback was short-lived. The Swiss National Bank reportedly intervened to weaken the Swiss franc, which quickly fed through into US dollar strength, she said.

The FOMC statement had no surprises and the "buy USD" theme continued in its wake.

The NZ dollar rose to 0.4590 euro at 8am from 0.4545 at 5pm, but slipped to 61.13 yen from 61.25.

Against the Australian dollar, the kiwi edged lower to A80.38c from A80.45c, while the trade weighted index lifted to 60.58 at 8am from 60.49 at 5pm.

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