NZ dollar reaches nine-month high

Reported by AAP
Thursday, December 13, 2012

Currency Converter

Mark BourisMyths bustedHome loans can seem a bit complicated and overwhelming. But it doesn't have to be. Mark Bouris clears up some common misconceptions.

The New Zealand dollar rose to a new nine-month high after the Federal Reserve extended its quantitative easing programme and tied the end of record low interest rates to a targeted drop in unemployment.

The kiwi dollar rose to 84.51 US cents from 83.90 cents at 5pm on Wednesday, the highest since it reached 84.71 cents on February 29.

The trade-weighted index rose to 75.30 from 74.91.

The Fed will buy Treasuries outright at a rate of $US45 billion a month, alongside $US40b a month of mortgage-backed securities, according to a Fed statement following a two-day meeting of policy makers.

It will keep the target range for the federal funds rate at zero to 0.25 per cent as long as the unemployment rate remains above 6.5 per cent and inflation "between one and two years ahead is projected to be no more than" 2.5 per cent.

The US jobless rate is now 7.9 per cent.

"What has really got the market going is the thresholds for the lower rate commitment," said Imre Speizer, strategist at Westpac Banking Corp.

If the jobless rate is slow to come down, rates would stay low for longer than the market expected.

The kiwi dollar rose to 79.88 Australian cents from 79.69 cents on Wednesday and climbed to 70.29 yen from 69.32 yen. It was at 64.54 euro cents from 64.50 cents.

25/04/2014 07:33Sydney, Australia. 25 April,2014
advertisement