Alongside Australian dollar, the kiwi dollar was also on higher levels against the US dollar on Tuesday, because demand for the greenback was put under pressure ahead of Ben Bernankes testimony to Congress tomorrow.
NZD/USD hit a session high at 0.7849 at 7:44 GMT, after which consolidation followed at 0.7831. Support was expected at July 12th low, 0.7754, while resistance was to be met at July 10th high, 0.7960.
Investors awaited the testimony on monetary policy by Ben Bernanke, scheduled on Wednesday, amid renewed speculation over the timing of FED’s Quantitative Easing scale back. Last week the greenback collapsed against the other major currencies, following the statement by FED Chairman Bernanke, who said that economy was still in need of monetary stimulus.
Meanwhile, earlier on Tuesday it became clear that consumer prices in New Zealand rose at a slower pace than projected during Q2, as import goods prices decreased. Consumer Price Index (CPI) rose by 0.2% during the second quarter, compared to the first quarter of the year, when prices increased by 0.4%, while experts had projected a rise in consumer prices by 0.3%. In annual terms, consumer inflation rose by 0.7% during Q2, the slowest rate of increase since 1999 and below the expected rate of 0.8%. Data showed that inflation rate in the country remained below the targeted by the central bank range of consumer prices, between 1 and 3 percent. This data could ease the pressure on the bank to consider an interest rate increase from the current record low level at 2.50%.
Elsewhere, New Zealand dollar was lower against its Australian peer, as AUD/NZD rose by 0.55% to reach 1.1721 at 8:37 GMT. The minutes of the Reserve Bank of Australias most recent meeting on policy revealed, that experts believe the current course of the banks policy to be appropriate.
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