WELLINGTON: The New Zealand dollar rose above 72 US cents as the greenback weakened before the Federal Reserve’s latest policy statement, which is expected to deliver a long-heralded rate hike in the US. The kiwi dollar traded at 72.15 US cents as at 5pm in Wellington from 71.94 cents late yesterday. The trade-weighted index rose to 79.18 from 78.91.
The Federal Open Market Committee’s two-day meeting will wind up tonight and decisions announced at the start of New Zealand’s day on Thursday. Investors have priced in more fiscal stimulus for the US economy under what may be a borrow and spend programme from president-elect Donald Trump, who isn’t actually sworn in until January 20 next year. Fed officials won’t have been able to assess the scope of any of the new administration’s policies or accurately reflect them in the official economic projections
“There are very few policy details at this stage in terms of Trump’s proposals. That’s the elephant in the room,” said Mark Johnson, senior dealer at OMF. “In terms of a rate hike, that’s a near-certainty.”
