The New Zealand dollar climbed above 83 US cents for the first time since early March after the Federal Reserve said it will begin a third round of asset purchases in the world's largest economy to boost growth and reduce unemployment.
The New Zealand dollar rose as high as 83.13 US cents, trading at 83 US cents at 8am up from 82.19 cents yesterday at 5pm. The trade weighted index increased to 73.35 from 72.86.
At the end of a two-day policy meeting, Fed Chairman Ben Bernanke announced the central bank would expand its holdings of long-term securities with open-ended purchases of US$40 billion of mortgage debt a month and pledged to keep interest rates at record lows until at least mid-2015. The Fed previously agreed to keep rates low until late 2014.
"The New Zealand dollar has done an awful lot already this morning - it may slow to build on these recent gains," said Alex Sinton, senior dealer at ANZ New Zealand. "You would expect some more US weakness but it may not come on the day."
Topside resistance for the kiwi is likely to come in around 82.30 US cents, Sinton said.
