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NZ dollar hits nine-month high

Reported by AAP
Wednesday, December 12, 2012
Super-rich getting richerThe world's super-rich could actually be wealthier than anyone first thought.

The New Zealand dollar rose to a nine-month high as it looks to break 84 US cents with the US Federal Reserve set to review monetary policy amid expectations it will roll out the printing presses for a fourth time.

The kiwi traded at 83.89 US cents at 5pm in Wellington from 83.83 cents at 8.30am and up 83.43 cents.

The trade-weighted index advanced to 76.92 from 74.66.

Fed chairman Ben Bernanke is expected to announce interest rates will stay near zero at the end of the Federal Open Market Committee's two-day meeting, though markets are gearing up for another round of asset purchases.

The Fed's "Operation Twist", which sees the central bank buy long-dated bonds and sell shorter maturities, expires this month and analysts are betting it will be replaced with more asset purchases.

"If they announce another round of quantitative easing, or what the market's calling QE4, we'll probably see the US dollar come under further pressure," said Dan Bell, currency strategist at HiFX in Auckland.

Mr Bell said the currency may struggle to get above 84.50 US cents, though some international economists are predicting the kiwi may go as high as 90 US cents next year.

"You can count on one hand the number of times the New Zealand has got over 84 cents since the free float of the currency," he said.

The Fed's meeting comes against the backdrop of protracted negotiations between US policymakers to try and reach accord on stopping $US600 billion of tax increases and spending cuts from kicking in on January 1.

The kiwi was little changed at 64.53 euro cents from 64.51 cents and gained to 52.09 British pence from 51.89 pence. The local currency rose to 69.18 yen from 68.70 yen and was little changed at 79.68 Australian cents from 79.66 cents.

02/09/2014 11:49Sydney, Australia. 2 September,2014
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