Forex - NZD/USD inches higher in thin trade
Investing.com
Published Oct 22, 2012 04:20AM ET
Investing.com - The New Zealand dollar edged higher against the U.S. dollar in holiday thinned trade on Monday, as local markets remained closed for Labor Day.
NZD/USD hit 0.8188 during European morning trade, the session high; the pair subsequently consolidated at 0.8170, easing up 0.15%.
The pair was likely to find near-term support at 0.8140, the low of October 17 and resistance at 0.8229, the high of October 18.
The New Zealand dollar was stronger against the Australian dollar after Australia’s government said it will cut spending to help produce a budget surplus this fiscal year, fuelling speculation over a rate cut by the country’s central bank next month.
Earlier Monday, Australian Treasurer Wayne Swan said the government remained on track to produce a budget surplus in the current fiscal year and added that planned spending cuts meant the Reserve Bank of Australia had increased scope to cut interest rates.
Market participants were looking ahead to Australian inflation data later in the week, amid concerns that weak numbers could increase the likelihood for an interest rate cut.
The Reserve Bank of New Zealand was expected to keep interest rates on hold at 2.5% following its policy meeting later in the week.
The New Zealand dollar was higher against its Australian counterpart, with AUD/NZD down 0.39% to 1.2612 and gained ground against the weaker yen, with NZD/JPY rising 0.61% to 65.08.
The yen remained under pressure amid expectations that the Bank of Japan may further increase the size of its asset purchase program at its upcoming policy meeting on October 30.
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Written By: Investing.com
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