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Forex - NZD/USD higher amid ECB easing hopes

Published 08/02/2012, 02:50 AM
NZD/USD
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AUD/NZD
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Investing.com - The New Zealand dollar was higher against its U.S. counterpart on Thursday, as investors awaited the outcome of the European Central Bank’s policy meeting, after the Federal Reserve held back from announcing more stimulus measures for the time being.

NZD/USD 0.8104 during late Asian trade, the daily high; the pair subsequently consolidated at 0.8090, adding 0.18%.

The pair was likely to find support at 0.8022, the low of July 4 and resistance at 0.8152, the high of May 2.

The risk-related kiwi found support as expectations that the ECB may resume its bond buying program, to help lower Spanish and Italian borrowing costs, have been building since central bank President Mario Draghi pledged last week to do whatever it takes to preserve the euro.

Investors remained cautious however, amid concerns that an inadequate policy response by the ECB could send markets lower.

Meanwhile, the U.S. central bank stopped short of launching a third round of quantitative easing, at its policy-setting meeting on Wednesday.

The Fed did indicate, however, that it will "closely monitor" the economy and "will provide additional accommodation as needed to promote a stronger economic recovery and sustained improvement in labor market conditions."

The kiwi was steady against the Australian dollar with AUD/NZD inching up 0.02%, to hit 1.2952.

Also Thursday, official data showed that Australia’s trade balance unexpectedly swung into a surplus in June, rising to a AUD0.01 billion surplus from a AUD0.31 billion deficit the previous month.

A separate report showed that retail sales in Australia rose more-than-expected in June, advancing 1% after a 0.8% increase the previous month and beating expectations for a 0.6% rise.

Later in the day, the U.S. was to release government data on initial jobless claims and factory orders.


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