NZ dollar climbs back over 70 cts before Bernanke

NZ dollar climbs back over 70 US cts ahead of Jackson Hole meeting

By Paul McBeth

Aug. 27 (BusinessDesk) – The New Zealand dollar climbed back over 70 U.S. cents as investors wait for the central bankers’ summit at Jackson Hole, where Federal Reserve chairman Ben Bernanke will kick of proceedings with a keynote speech on the U.S. economy.

Markets are in a holding pattern as they wait to see whether Bernanke will ramp up a new wave of quantitative easing to help revive a sagging recovery in the U.S. and stave off the threat of a double-dip recession. Fewer Americans claimed an unemployment benefit last week and mortgage foreclosures and delinquencies declined in the second quarter, though the better data failed to ignite stock markets, with the Dow Jones Industrial Average down 0.7%.

“Markets are waiting for the Bernanke speech, and are wondering if he’s reflecting on the possibility of doing major new QE (quantitative easing),” Imre Speizer, market strategist at Westpac Banking Corp. said. Equity markets closed quite weak and “that might creep into currencies when Asia opens.”

The kiwi edged up to 70.33 U.S. cents from 70.23 cents yesterday, and gained to 65.91 on the trade-weighted index of major trading partners’ currencies from 65.85. It was little changed at 59.40 yen from 59.38 yen yesterday, and rose to 79.27 Australian cents from 79.14 cents. It traded at 55.26 euro cents from 55.23 cents yesterday, and increased to 45.28 pence from 45.17 pence.

Speizer said the currency may trade between 70 U.S. cents and 70.80 cents today and will probably test the bottom of the range over the next couple of trading sessions.

The next piece of local data on the horizon is next Monday’s National Bank Business Outlook, which will probably show firms are getting more pessimistic amid the weaker economic outlook.

(BusinessDesk)

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