New Zealand Dollar Strengthens Before Fed Meeting

The New Zealand dollar rose against its US counterpart on the speculation that the US Federal Reserve would announce today the next round of the quantitative easing.

The greenback weakened against the higher-yielding currencies, including the New Zealand one, as the market participants anticipate the Fed to announce its asset-purchase plans today. There’s the risk, of course, that the Fed would surprise everybody and wouldn’t perform the easing or the stimulus wouldn’t be that big. Such outcome would prompt a rapid sell-off by the speculators and rally of the US currency.

NZD/USD traded at 0.7736 today as of 12:25 GMT after opening at 0.7709 and jumping to 0.7769. Currently the currency pair shows the tendency to decline.

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