NZD/USD advanced to four-month highs

New Zealand dollar climbed to its highest point in four weeks against the US peer on Monday, as the greenback was still pressured after Lawrence Summers decision to withdraw from the contest for the Federal Reserve Chairman position and amid expectations of the two-day meeting on policy by the central bank.

NZD/USD soared to a session high at 0.8227 during the late phase of Asian trade, after which consolidation followed at 0.8214, gaining 0.91% for the day. Support was likely to be found at September 12th low, 0.8109, while resistance was to be encountered at May 14th high, 0.8302.

The outcome of the two-day meeting by the Federal Reserve Bank was highly anticipated, as most experts project that stimulus program tapering might happen this month, despite the mixed economic data that came out of the United States last week.

In addition, US dollar lost ground against peers, after it became clear that President Obama’s favorite candidate for the post of Fed Chairman until yesterday, Lawrence Summers withdrew from the contest. This eased concerns that he would roll back stimulus measures more eagerly than his main contender for the Governor post, Janet Yellen.

Meanwhile, US Secretary of State John Kerry will meet with French President Francois Hollande and his counterparts from France and the United Kingdom to ensure support for a plan to eliminate Syrian chemical weapons, Bloomberg imparted. Kerry negotiated on this matter with Russian Foreign Minister Sergei Lavrov last week.

In New Zealand, Westpac Banking Corporation and McDermott Miller said that the index of consumer confidence came in at 115.4 during the third quarter of the year, down from a reading of 116.6 in the preceding quarter.

According to a separate report, Business NZ performance of services index (PSI) showed a value of 53.2 in August, as in July it stood at 58.2. The level of 50.0 is a key one, as it stands for an average value of expectations, distinguishing between recession and development. The more the index distances from this average value, the stronger expectations of a recession or economic development appear to be.

Elsewhere, the kiwi dollar was lower against the Aussie, with AUD/NZD cross advancing 0.40% to trade at 1.1417 at 8:46 GMT.