The New Zealand dollar weakened today on the speculation that it rallied yesterday too much and after the forecast about the slow economic grow proved true.
The New Zealand dollar surged yesterday after the Federal Reserve kept the interest rates at the record low level. This news ignited the optimism for the kiwi (as the New Zealand currency commonly nicknamed) as the difference between the low rates in U.S. (between 0 and 0.25 percent) and the high interest rates in the New Zealand (2.75) attracts to the country the investors, interested in the carry trade. The optimism was diminished after the gross domestic product showed the growth of 0.6 percent.
The traders think that yesterday’s jump was unreasonably high. They expect the recovery in New Zealand to continue, but it would be very gradual. Therefore, the currency will have tough time to exceed its yesterday’s highs.
NZD/USD fell to 0.7101 as of 19:11 GMT from its opening level of 0.7134. EUR/NZD traded at about 1.7358 after it opened at 1.7245. NZD/JPY dropped to about 63.62.
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