The New Zealand dollar rose above 75 US cents, to the highest level in more than two years, after the US Federal Reserve said it would begin reducing its bloated balance sheet "relatively soon". The greenback fell against a basket of major currencies after the Fed's announcement.
The kiwi dollar reached 75.28 US cents, the highest since May 2015, and was trading at 75.12 cents as at 8am in Wellington from 74.38 cents late yesterday. The trade-weighted index climbed to 79.10, well above the 75.8 average level the Reserve Bank forecast for the third quarter, from 78.53 yesterday.
See live rates for the NZ-US $ below. Click for more information:
The Federal Open Market Committee kept its target interest rate unchanged as expected at the end of its two-day meeting, saying "near-term risks to the economic outlook appear roughly balanced" though it "is monitoring inflation developments closely." But it also said it would "begin implementing its balance sheet normalisation program relatively soon" if the economy evolved as expected, having previously said it would reduce its bond holdings "this year", with the change in language seized on by the market.
