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Forex - NZD/USD slips after RBNZ rate decision, eyes on Fed

ForexSep 13, 2012 02:44AM ET
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Investing.com - The New Zealand dollar slipped against its U.S. counterpart on Thursday, after the Reserve Bank of New Zealand left interest rates unchanged, while investors eyed comments by Federal Reserve Chairman Ben Bernanke later in the day.

NZD/USD hit 0.8226 during late Asian trade, the daily high; the pair subsequently consolidated at 0.8202, slipping 0.11%.

The pair was likely to find support at 0.8168, Wednesday’s low and resistance at 0.8278, the high of April 12.

In a widely expected move, the RBNZ left the benchmark interest rate unchanged at a record low of 2.50%, earlier in the day.

Commenting on the decision, RBNZ Chairman Allan Bollard said there was little need to raise borrowing costs until the second half of 2013 because of risks from the euro zone’s financial crisis and the outlook for New Zealand’s trading partners, including China.

The decision was Bollard’s last in a 10-year tenure before he steps down later this month, succeeded by former World Bank co-managing director Graeme Wheeler.

Sentiment remained supported after Germany’s constitutional court approved the country’s participation in the euro zone’s bailout fund, the European Stability Mechanism on Wednesday.

The ruling cleared the way for Germany’s president to ratify the ESM under certain conditions, allowing the European Central Bank’s bond purchasing program to proceed.

Meanwhile, markets were eyeing the outcome of the Fed’s policy meeting later Thursday, amid growing speculation that the U.S. central bank may implement a third round of quantitative easing to bolster growth.

The kiwi was also lower against the euro with EUR/NZD adding 0.24%, to hit 1.5750.

Later in the day, the U.S. was to publish government data on producer price inflation, as well as a weekly report on initial jobless claims.

The Federal Reserve was to announce its benchmark interest rate, followed by comments by Chairman Ben Bernanke.


Forex - NZD/USD slips after RBNZ rate decision, eyes on Fed
 

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