The New Zealand dollar rose for the first time in a week after weak US manufacturing and tepid inflation figures stoked speculation the Federal Reserve will unveil plans for a third round of asset purchases at the central bankers' summit in Jackson Hole, Wyoming this month.
The kiwi rose to
80.68 US cents from 80.51 cents at 5pm in Wellington yesterday. The trade-weighted index advanced to 72.75 from 72.56 yesterday.
Wall Street's Standard & Poor's 500 Index rose 0.1 per cent after Empire State manufacturing shrank against expectations of growth, and figures showed zero inflation in July.
That resurrected expectations the Fed will announce a third round of quantitative easing at the Jackson Hole summit, which would continue to keep pressure on the strength of the US dollar as the Fed prints more money.
"Weak US data gave equities a nudge higher" which lifted the kiwi, said Imre Speizer, market strategist at Westpac Banking in Auckland. "Weaker US data is good for the prospects of QE3."
