20 Jun 2013

NZ dollar falls after Fed signals pullback

12:01 pm on 20 June 2013

The New Zealand dollar has fallen after the US Federal Reserve indicated it may begin to scale back its stimulus measures later this year.

The kiwi has dropped about 0.5 cents to around 79 US cents.

Fed chairman Ben Bernanke said if growth continues to pick up pace, it could begin reducing its $US85 billion per month payments in bond purchases sometime later this year, and bring the operation to a close by the middle of next year.

The New Zealand dollar rose on Thursday morning against the Australian dollar and was trading about 85 Australian cents.

Westpac currency strategist Imre Speizer said he expects the kiwi to contine to fall to around 78 US cents in the next few months. But depending on economic news in the United States, there was a chance it could go even lower.

The Australian dollar was buying 92.77 US cents at 7.45am AEST. AAP reports it is the first time since September 2010 that the dollar has been below 93 US cents.