The New Zealand dollar was volatile following the release of the Federal Reserve minutes to its last meeting this morning, as the minutes failed to outline plans for likely interest rate hikes in the world's largest economy.
In the hour following the publication of the minutes at 8am New Zealand time, the kiwi traded between 78.39 US cents 78.93 cents, from 78.71 cents immediately before the release and 78.70 cents at 5pm yesterday.
Traders were scouring the minutes to the Fed's October meeting for clues about the outlook for interest rates, which the policy making committee has previously said would remain near zero for a "considerable time". However despite the Fed sounding more upbeat about the improvement in the US economy at this meeting and calling an end to its stimulatory bond-buying programme, the minutes didn't provide any further detail on when and how the central bank could begin to raise short-term interest rates, which have been near zero since December 2008.
"There was a little bit of something for everyone in the minutes. It's pretty balanced," Sam Tuck, senior foreign exchange strategist at ANZ Bank New Zealand, told BusinessDesk. "The minutes do read like everybody was expecting, i.e. they are a little bit more optimistic about the outlook but we had already got that from the statement.
"There are not really that many new surprises in there. If anything, the New Zealand dollar might find a little bit of strength on this, because markets might have been looking for just a little bit more confidence or a little bit more news about how long 'considerable time' is," the ANZ's Tuck said.
