The kiwi was little changed at 84.15 US cents at 8am in Wellington from 84.13 cents at 5pm yesterday.
The kiwi was little changed at 84.15 US cents at 8am in Wellington from 84.13 cents at 5pm yesterday.
The New Zealand dollar edged up in volatile trading after Federal Reserve chairman Ben Bernanke emphasised the central bank's asset purchase programme could be reduced more quickly or expanded depending on economic conditions.
The kiwi traded at 79 US cents from 78.70 cents at the 5pm market close in Wellingtonyesterday. The local currency traded between 78.39 US cents and 79.39 cents overnight as investors mulled Bernanke's comments for clues to when the central bank may unwind its quantitative easing programme. The trade-weighted index gained to 74.71 from 74.50 yesterday.
Bernanke, in the first day of a two-day testimony to the House of Representatives in Washington, said the pace of the US$85 billion a month in asset purchases is not on a "preset course" but is dependent on the strength of economic data. Financial markets have been volatile since Bernanke said last month he could scale back bond buying later this year and end it in mid-2014 if the world's largest economy picks up speed.
"Most of Bernanke's address was directed toward stressing QE tapering is not yet locked and loaded, and remains highly conditional on the strength of the US economy," Mike Jones, currency strategist at the Bank of New Zealand, said in a note. "As a result, markets have backed off pricing September as the most likely tapering start date."
The New Zealand dollar is likely to stay within its range of 78.50 US cents to 82.50 cents for the next few weeks, said BNZ's Jones.
"Bernanke's testimony leaves us more comfortable with our view that the NZD/USD is more likely to stabilise in a sideways, to slightly higher range, than to keep falling," Jones said.
In New Zealand today, traders will be eyeing the ANZ Roy Morgan consumer confidence report which is expected to hold up despite higher petrol prices, Jones said.
The kiwi declined to 51.94 British pence from 52.07 pence yesterday after the latest Bank of England minutes revealed a unanimous decision to leave asset purchases unchanged. Investors had expected at least three monetary policy committee members to vote for more easing, as was the case in the previous five meetings, Jones said.
The local currency rose to 85.53 Australian cents, from 85.29 cents yesterday. The kiwi gained to 78.65 yen from 78.21 yen and increased to 60.22 euro cents from 59.88 cents.
