Investing.com - The New Zealand dollar moved lower against the U.S. dollar Thursday, following the decision by New Zealand’s central bank to leave interest rates unchanged while leaving open the possibility of a rate hike if the global economy improves.
NZD/USD hit 0.7987 in early Asian trade, the pair’s lowest since Wednesday; the pair subsequently consolidated at 0.7994, declining 0.22%.
The pair was likely to find support at 0.7901, last Friday’s low, and resistance at 0.8109, Monday’s high.
The Reserve Bank of New Zealand left interest rates unchanged at an all-time low of 2.5%.
“Given the ongoing global economic and financial risks, it remains prudent to continue to keep the OCR (official cash rate) on hold for now,” RBNZ Governor Alan Bollard said following the central bank’s decision.
“However, if global developments have only a mild impact on the New Zealand economy, it is likely that gradually increasing pressure on domestic resourced will require future OCR increases,” Bollard added.
Meanwhile, market players continued to monitor talks between European leaders hoping for a break-through in talks aimed at conquering the region’s debt woes.
At a summit of European leaders in Brussels, European Council President Herman Van Rompuy said that finance ministers would finalize workings of a bank recapitalization plan outlined earlier Wednesday.
French President Nicolas Sarkozy was reportedly hoping to enlist the support of China who would contribute to the fund by purchasing bonds issued by the EFSF.
Elsewhere Wednesday, the U.S. Census Bureau reported that sales of new homes rose more than expected, by 5.7% in September, to 313,000 units. Market expectations were for an increase to 300,000 units for the month.
Separately, the Census Bureau announced that core durable goods orders advanced by 1.7% in September, outstripping economist forecasts of a 0.5% increase. Durable goods orders, including transportation items, fell by 0.8% in September, the second straight monthly drop.
In Wellington, New Zealand shares moved higher in early Thursday trade, with the benchmark NZX Limited adding 0.10% to 3,300.16.
Meanwhile, the New Zealand dollar was lower against both the euro and the Australian dollar, with EUR/NZD rising 0.24% to hit 1.7390, and AUD/NZD up 0.22% to hit 1.3004.
The U.S. Department of Labor was scheduled to release its latest weekly report on jobless claims later Thursday.