New Zealand Dollar Rises, But Gains Tempered by Growth Outlook

The New Zealand dollar rose today at the start of the trading session against the US dollar and the Japanese yen as the gains of the Asian stocks increased the appeal of the higher-yielding currencies, but for the most part of the day it was declining as the fundamentals in New Zealand weren’t supportive to the currency.
The MSCI Asia Pacific Index of shares gained as much as 1 percent and the Standard & Poor’s 500 Index rose 0.6 percent. The kiwi, as the New Zealand currency commonly nicknamed, also gained on the prediction that the consumer confidence in New Zealand, as wells as in the US and Germany. The gains were erased after the reports showed that the consumer confidence actually worsened.
Another news from New Zealand weren’t good either. The Reserve Bank of New Zealand kept the overnight cash rate unchanged at 3 percent yesterday. The bank cut its growth forecast by 0.3 percentage point for this quarter on the concerns that the earthquake, which occurred at September 4th in the city of Christchurch, may cripple the nation’s economy. The unfavorable fundamentals signal that the future rate increases may be performed with slower pace.
NZD/USD closed at 0.7254 after opening at 0.7239 and rising to the intraday high of 0.7331. NZD/JPY closed at 62.23 after it opened at 62.09 and reached its daily high of 62.95.

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