Kiwi marks time ahead of German, Fed moves
Tue, 11 Sep 2012 6:12p.m.
The New Zealand dollar was little changed in local trading as investors await key economic decisions in Europe and the United States.
The kiwi traded at 81 US cents at 5pm in Wellington from 80.83 cents at 8am and 81.16 cents on Monday.
The trade-weighted index fell to 72.36 from 72.51.
Germany's Federal Constitutional Court will rule on the nation's participation in the 500 billion euro European Stability Mechanism, a fund set up to help euro-zone member states lower their borrowing costs by providing cheap loans.
The fund is a central plank in the region's plans to prevent a full-blown sovereign debt crisis, with the so-called PIIGS (Portugal, Ireland, Italy, Greece and Spain) struggling to contend with ballooning interest costs.
That comes as investors prepare for the Federal Open Market Committee meeting this week, where chairman Ben Bernanke is expected to announce a third round of quantitative easing (QE3) and push out the timeframe for near-zero interest rates to 2015.
The German ruling "could be a small risk overnight, but the big thing we'll be waiting for is Thursday's FOMC meeting," said Imre Speizer, market strategist at Westpac Banking Corp in Auckland.
"Markets are long on risk assets already leading into the meeting and we've already had the signal (for QE3), so we might not get a big initial reaction" in the kiwi, he said.
The New Zealand dollar fell to 78.26 Australian cents from 78.35 cents on Monday and slipped to 63.35 yen from 63.50 yen.
The kiwi was little changed at 63.42 euro cents from 63.50 cents.
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