The New Zealand dollar jumped, rising briefly above 70 US cents, after the US Federal Reserve pulled back its projections for future interest rate rises and lowered its growth estimate for the world's biggest economy this year.
The kiwi rose as high as 70.10 US cents from 69.26 cents immediately
before the Fed statement at 6am New Zealand time, and was trading at 69.94 cents at 8am from 69.66 cents at 5pm yesterday.
The trade-weighted index slipped to 72.67 from 72.73 yesterday.
The New Zealand dollar weakened leading up to the Fed statement, touching a fresh five-year low of 68.74 US cents, as traders anticipated the Fed would reinforce its expectations for future interest rate hikes in the US.
However, while the Fed maintained its projection for the benchmark interest rate to gain this year to 0.625 per cent, implying two quarter-point rate rises by the end of the year, it lowered its forecast for 2016 to 1.625 per cent from 1.875 per cent, and for 2017 to 2.875 per cent from 3.125 per cent.
