Forex - NZD/USD hits 2-day high as market sentiment strengthens

Forex Pros – The New Zealand dollar was up against its U.S. counterpart on Tuesday, rising to a two-day high as market sentiment improved, boosting demand for higher yielding assets.

NZD/USD hit 0.8194 during late Asian trade, the pair’s highest since Friday, the pair subsequently consolidated at 0.8191, gaining 0.59%.

The pair was likely to find support at 0.8071, Friday’s low and resistance at 0.8262, the high of May 31 and the pair’s highest since exchange rate controls ended in 1985.

Earlier in the day, the Reserve Bank of Australia held the overnight cash rate at 4.75% in a widely expected decision. Central bank Governor Glenn Stevens said the decision reflects “softened” prices for raw materials and an unemployment rate that’s been little changed near 5%.

The Reserve Bank of New Zealand was to hold its policy setting meeting later in the week. The central bank was also expected to leave rates unchanged, after Governor Alan Bollard indicated that the strength of the kiwi was a hurdle to the local economic recovery.

The kiwi was also higher against its Australian cousin, with AUD/NZD shedding 0.68% to hit 1.3059.

Later in the day, Federal Reserve Chairman Ben Bernanke was to speak. His comments would be closely watched for his views on the U.S. economic recovery.

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