NZ dollar little changed ahead of bankers' summit

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The New Zealand dollar was little changed amid heightened investor nervousness ahead of the central bankers' summit at Jackson Hole on Friday.

The New Zealand dollar recently traded at 83.80 US cents, up from 83.73 cents yesterday, and rose to 71.04 on the trade-weighted index of major trading partners' currencies from 71.01 previously.

Central bankers from around the world are heading to their annual meeting at Jackson Hole in Wyoming, U.S.A., where Federal Reserve chairman Ben Bernanke is expected to drop hints at a third round of quantitative easing.

The major impediment to a third round of asset buying is U.S. inflation, with both consumer and core inflation almost double what they were a year ago when the Fed first floated the idea of QE2.

That damped gains on equity markets in New York and Europe, which showed signs of improved investor sentiment.

On Wall Street, the Standard & Poor's 500 Index rose 1.3 per cent to 1,177.54, and Europe's Stoxx 600 closed 1.4 per cent higher at 229.79.

Gold prices tumbled, with the precious metal recently trading at US$1,749.89 an ounce, down from historic highs of US$1,900 earlier in the week.

Yields on 10 year US Treasury Bills rose to 2.28 per cent from 2.11 per cent previously, and commodities fell 0.8 per cent to 331.59 as measured by the 19-commodity Thompson Reuters Jefferies CRB Index.

"One gets the distinct feeling that we are treading water ahead of Fed chair Ben Bernanke's Jackson Hole speech," said Alex Sinton, a senior dealer at ANZ New Zealand.

"Expect the New Zealand dollar to consolidate around current levels in the lead up to news from Jackson Hole."

On the crosses, the New Zealand dollar recently traded at 79.02 Australian cents, down from 79.12 cents yesterday, and rose to 63.71 Japanese yen from 63.40 yen previously.

It declined to 57.36 euro cents from 57.46 cents yesterday, and climbed to 50.53 pence from 50.21 pence previously.

Sinton said the kiwi dollar may trade between a range of 82.40 U.S. cents and 83.10 cents.