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Forex - NZD/USD near 4-week lows after RBNZ, Fed statements

Published 10/30/2014, 03:54 AM
Updated 10/30/2014, 03:54 AM
Kiwi trades near 4-week trough vs. dollar on central bank statements

Kiwi trades near 4-week trough vs. dollar on central bank statements

Investing.com - The New Zealand dollar slipped to nearly four-week lows against its U.S. counterpart on Thursday, after the Reserve Bank of New Zealand left interest rates unchanged and the Federal Reserve announced the end of its easing program.

NZD/USD hit 0.7774 during late Asian trade, the pair's lowest since October 6; the pair subsequently consolidated at 0.7794, easing 0.10%.

The pair was likely to find support at 0.7712, the low of October 6 and resistance at 0.7904, the high of October 27.

In a widely expected move, the RBNZ held its benchmark interest rate at 3.50% and signaled that borrowing costs should remain on hold for an extended period of time.

Commenting on the decision, RBNZ Governor Graeme Wheeler said the New Zealand dollar's current level "remains unjustified and unsustainable," adding that he expects "a further significant depreciation."

Meanwhile, the greenback found broad support after the Fed said targets for inflation and a reduction in unemployment were on track, but added that interest rates would remain close to zero for a "considerable time".

The U.S. central bank said that although the jobs market is strengthening, there is still room for improvement, but not "significant improvement," as it has said previously, in the labor market participation rate.

"The Committee continues to see sufficient underlying strength in the broader economy to support ongoing progress toward maximum employment in a context of price stability," the Fed said.

The kiwi was higher against the euro, with EUR/NZD shedding 0.22% to 1.6154.

Later in the day, the U.S. was to publish revised data on third quarter GDP, as well as the weekly report on initial jobless claims. In addition, Fed Chair Janet Yellen was to speak at an event in Washington.

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