WELLINGTON--The New Zealand dollar was slightly lower Friday, with trade drifting sideways ahead of a speech by U.S. Federal Reserve Chairman Ben Bernanke at Jackson Hole later in the global trading day. "The reality is that Bernanke and Jackson Hole is the only show in town" for markets right now, said Western Union Business Solutions Corporate Dealing Manager Chris Hunter. The Kiwi ticked higher late in the session, coming off a low of US$0.7975, on what Mr. Hunter said "may just be a last-minute burst of optimism that we are going to see something around quantitative easing" in Mr. Bernanke's speech. However, Mr. Hunter warned "the most likely risk is that there is not a single mention of (QE3) tonight which would put the Kiwi under pressure." Bank of New Zealand FX Strategist Kymberly Martin also agreed markets may be in for some disappointment. "We expect maybe not too much new information will be provided to a very expectant market. The Fed may prefer to maintain its FOMC meetings as the platform for revealing new policy initiatives," she said. HSBC Chief Manager for New Zealand Daniel Brdanovic noted that there will also be interest in China's official Purchasing Managers' Index data, an indicator of manufacturing activity, due over the weekend. Government bonds ended slightly higher but a local bond trader said trading was thin with all eyes on Jackson Hole.

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