Kiwi Dollar Reaches 6-Month High Versus U.S. Counterpart on Fed
New Zealand’s dollar rose to a six- month high versus its U.S. counterparts after the Federal Reserve’s plan to add to bond purchases spurred demand currencies of nations with higher returning assets.
The Australian currency reached to a one-month high as stocks and commodities assets rallied after the U.S. central bank said it will expand its holdings of long-term securities with open-ended purchases of $40 billion of mortgage debt a month. The so-called kiwi was also supported after the Reserve Bank of New Zealand kept its benchmark interest rate unchanged Sept. 12.
“It’s pretty close to going all-in,” said David Mann, regional head of research for the Americas at Standard Chartered in New York. “The market was looking for something aggressive and they do have it.”
New Zealand’s currency rose 1.2 percent to 83.10 U.S. cents at 5 p.m. in New York. It earlier gained 1.4 percent to 83.24 U.S. cents, the strongest since March 2. The currency rose 0.8 percent to 64.40 yen.
Australia’s dollar rallied 0.8 percent to $1.0547 after touching $1.0568, the highest since Aug. 13. It fetched 81.72 yen, 0.3 percent stronger.
The Federal Open Markets Committee said it would probably hold the federal funds rate near zero “at least through mid- 2015.” Since January, the Fed had said the rate was likely to stay low at least through late 2014. The Fed said “a highly accommodative stance of monetary policy will remain appropriate for a considerable time after the economic recovery strengthens.”
In New Zealand, Alan Bollard, the central bank governor, and his board left the official interest rate at 2.5 percent and signaled it would remain unchanged through mid-2013.
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