In lackluster trading and as investors focused on currencies with higher yields, the New Zealand Dollar managed to carve out gains and then hovered close to a 3-year peak. For several months, New Zealand’s Reserve Bank has maintained a hawkish bias and in its current cycle of tightening monetary policy and with a 3.25% cash rate which is the highest among developed nation peers, the Kiwi Dollar has become a favorite among FX traders.
As reported at 10:55 a.m. (JST) in Tokyo, the NZD/USD traded at a high of $0.8790, a price last struck in August 2011, before dipping slightly to $0.8780. The U.S. Dollar Index, a measure of the greenback’s strength against major rivals, edged about 0.2% lower for the week and was earlier trading at 80.208 .DXY. The USD/JPY was trading at 101.65 Yen, recovering from a 1-month trough at 101.48 Yen.
Economic Data Casts Uncertainty on U.S. Recovery
The U.S. Dollar has come under some recent pressure as investors take to the sidelines to await clearer direction from the Federal Reserve Bank in the wake of mixed data which has exacerbated market uncertainty. In the U.S., consumer spending was reported as unexpectedly disappointing, and coming so soon after the downward third revision to growth figures for the first quarter, many analysts are already reconsidering previous growth forecasts, raising speculation that the Fed might push a rate hike even further back.