Bernard Hickey details the key news overnight in 90 seconds at 9 am in association with Bank of New Zealand, including news that the US dollar weakened again overnight as markets prepared for an expected announcement next week of a second round of quantitative easing or money printing known as QE II.
The US Federal Reserve checked with its primary dealers this week about the expected size and timing of the money printing, reinforcing expectations that the US Federal Reserve would announce a second round of printing next Thursday morning our time.
Markets are expecting around US$500 billion to US$1 trillion worth of quantiative easing where the US Federal Reserve creates new money to buy US Treasury bonds, effectively monetising government debt.
The New Zealand dollar strengthened to 75.4 USc and the Australian dollar rose to 97.9 USc, but the New Zealand dollar also rose to near a one month high vs the Australian dollar because weaker than expected inflation data in Australia watered down expectations of a rate hike over the Tasman on Melbourne Cup day next Tuesday.
Meanwhile, elsewhere in the currency Tri-Nations, South Africa is moving to protect its exporters by trying to keep the rand from rising amidst the Currency Wars.
The government announced overnight it would allow further South African investment overseas to encourage Rand sales and it transferred funds to the central bank to intervene to sell the Rand on currency markets.
Back in New Zealand, Tower announced it would let its hostile takeover bid for locally owned insurer Fidelity Life to lapse while it considered the results in Fidelity's latest accounts.