Investing.com – The New Zealand dollar fell against its U.S. counterpart during Thursday’s Asian trade, extending losses from Wednesday’s U.S. session amid talk the Reserve Bank there might be inching toward intervention in the currency market.
In Asian trading Thursday, NZD/USD fell 0.20% to 0.8342 after closing at at 0.8406, down 0.74%, during Wednesday’s U.S. session. The pair was likely to find support at 0.8353, the low of January 25 and resistance at 0.8468, the session high.
On Wednesday, Reserve Bank Governor Graeme Wheeler said the kiwi is vastly overvalued relative to New Zealand’s underlying economic fundamentals while adding he stands ready to possibly intervene in the currency market.
Perhaps coincidentally, Wheeler made the remarks before the Manufacturers and Exporters Association, a trade group that has been overtly critical of his view on the kiwi. Executives from New Zealand’s industrial firms have been pushing the government and the RBNZ to take action to stem the tide of the rising dollar.
Still, some New Zealand officials have voiced concerns about currency market intervention, cautioning that it might not have the desired impact. Wheeler was clear to note he wants any intervention efforts to make a difference and that RBNZ would intervene "when circumstances are right."
A case can be made that at this point, moving to weaken the kiwi may be a case of too little too late. Since late 2008, only the Aussie dollar has performed better against the greenback than the kiwi among developed world currencies.
Wheeler was also clear in ruling out Federal Reserve or Bank of Japan-style money printing, also known as quantitative easing. Arguably, the New Zealand economy has performed better than those that engaged in QE since the global financial crisis.
Elsewhere, NZD/JPY fell 0.12% to 78.15 while AUD/NZD rose 0.04% to 1.2277.
In Asian trading Thursday, NZD/USD fell 0.20% to 0.8342 after closing at at 0.8406, down 0.74%, during Wednesday’s U.S. session. The pair was likely to find support at 0.8353, the low of January 25 and resistance at 0.8468, the session high.
On Wednesday, Reserve Bank Governor Graeme Wheeler said the kiwi is vastly overvalued relative to New Zealand’s underlying economic fundamentals while adding he stands ready to possibly intervene in the currency market.
Perhaps coincidentally, Wheeler made the remarks before the Manufacturers and Exporters Association, a trade group that has been overtly critical of his view on the kiwi. Executives from New Zealand’s industrial firms have been pushing the government and the RBNZ to take action to stem the tide of the rising dollar.
Still, some New Zealand officials have voiced concerns about currency market intervention, cautioning that it might not have the desired impact. Wheeler was clear to note he wants any intervention efforts to make a difference and that RBNZ would intervene "when circumstances are right."
A case can be made that at this point, moving to weaken the kiwi may be a case of too little too late. Since late 2008, only the Aussie dollar has performed better against the greenback than the kiwi among developed world currencies.
Wheeler was also clear in ruling out Federal Reserve or Bank of Japan-style money printing, also known as quantitative easing. Arguably, the New Zealand economy has performed better than those that engaged in QE since the global financial crisis.
Elsewhere, NZD/JPY fell 0.12% to 78.15 while AUD/NZD rose 0.04% to 1.2277.