The New Zealand and Australian currencies snapped two-day gains versus the greenback as Federal Reserve policy makers debate a reduction in U.S. stimulus that’s elevated asset prices across the globe.
The kiwi dollar fell against all its major peers as New Zealand Finance Minister Bill English said his nation would benefit if the currency weakens. The Aussie was supported by private reports showing Australia’s leading economic indicators improved in July. The Fed concludes a meeting today, with economists forecasting a $5 billion cut in monthly bond buying.
“The Aussie and particularly the kiwi have rallied quite significantly over the last two to three weeks,” said Thomas Averill, a managing director in Sydney at Rochford Capital, a currency and interest-rate risk-management company. Before the Fed’s announcement “people that have been long these currencies are perhaps taking a little bit of risk off the table.” A long position is a bet an asset will rise.
This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.