Forex - NZD/USD falls as traders eye BoJ, Fed
Published May 21, 2013 10:00PM ET
In Asian trading Wednesday, NZD/USD fell 0.15% to 0.8159. The pair was likely to find support at 0.8140, the session low and resistance at 0.8264, the high of May 15.
The kiwi hit a three-day against the greenback during Tuesday’s U.S. session, but the New Zealand dollar is still laboring around eight-and-a-half-month lows against the U.S. currency.
The U.S. central bank has been trying to dispel rumors the end of QE3 is in sight. Federal Reserve governors have suggested in public recently that the U.S. central bank may begin to scale back stimulus tools this summer, causing uncertainty in markets, weighing on oil and other commodities along the way.
However, remarks heard Tuesday gave investors confidence the Fed will continue its asset-buying program in the near-term, which modestly boosted some riskier currencies in the process.
On Tuesday, the Reserve Bank of New Zealand earlier said that its inflation expectations ticked down to 2.1% in the first quarter, from 2.2% in the previous quarter.
Still, RBNZ is performing something of a tightrope act in balancing a potentially overheating property market while trying to weaken the kiwi without lowering interest rates. In fact, the central bank is one of only a few to not recently lower rates and expectations are in place that if property values in New Zealand keep rising, RBNZ’s hand will be forced and a rate increase will occur.
Elsewhere, AUD/NZD inched down 0.04% to 1.2001 while NZD/JPY nudged down 0.05% to 83.70. EUR/NZD rose 0.28% to 1.5842.
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Written By: Investing.com
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