Foreign exchange - NZD/USD bounces off 1-month trough however positive aspects capped

Kiwi rises against greenback but upside seen limited

Investing.com – The New Zealand dollar edged higher against its U.S. counterpart on Thursday, bouncing off a one-month trough as the minutes of the Federal Reserve’s latest policy meeting weighed on the greenback.

hit 0.6661 during late Asian trade, the session high; the pair subsequently consolidated at 0.6661, rising 0.32%.

The pair was likely to find support at 0.6592, the low of December 9 and resistance at 0.6711, Wednesday’s high.

The greenback weakened mildly after the minutes of the Fed’s December meeting showed that some officials expressed concern that inflation would linger below their 2% objective.

Concerns over inflation are likely to remain central in the pace of the Fed’s next rate hikes this year.

For the first time since 2006, the Fed raised interest rates by a quarter of a percentage point to between 0.25% and 0.50% at December policy meeting.

But the New Zealand dollar’s gains were capped as investors remained cautious after North Korea confirmed on Wednesday that it had conducted a successful nuclear test.

Markets were also jittey amid growing tensions between Iran and Saudi Arabia, following the execution of a prominent Saudi Shia cleric.

The kiwi was higher against the Australian dollar, with declining 0.53% to 1.0593.

The Australian Bureau of Statistics reported on Thursday that declined by 12.7% in November, compared to expectations for a 3.0% fall. Building approvals rose 3.3% in October, whose figure was revised from a previously estimated 3.9% increase.

A separate report showed that narrowed to A$ 2.906 billion in November from A$ 3.247 billion in October, whose figure was revised from a previously estimated deficit of A$ 3.305 billion.

Analysts had expected the trade deficit to hit A$ 3.100 billion in November.

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Foreign exchange - NZD/USD bounces off 1-month trough however positive aspects capped