NZ dollar little changed ahead of OCR review expected to carry 'no hurry'
By Jonathan Underhill
Aug. 10 (BusinessDesk) - The New Zealand dollar was little changed, having fallen this week ahead of the Reserve Bank's monetary policy statement this morning, which is expected to reiterate it sees no hurry to join other central banks in raising interest rates.
The kiwi traded at 73.26 US cents as at 8am in Wellington from 73.16 cents late yesterday. The trade-weighted index was little changed at 77.26 from 77.19 yesterday.
Governor Graeme Wheeler, in his last MPS before he retires, is expected to keep the official cash rate unchanged at 1.75 percent and traders will be more focused on the bank's projections for interest rates, inflation and economic growth. At the May MPS, only one quarter-point rate hike was projected by 2020 and there has been speculation the forecasts today will be just as flat. The kiwi wasn't much hurt by a drop in risk sentiment amid an escalating exchange of threats between North Korea and the US.
"We expect Governor Wheeler to play with a straight bat today in his final showing as governor, running with a similar tone adopted all year," said Jason Wong, currency strategist at Bank of New Zealand, in a note. "The underlying message will be that the RBNZ is in no hurry to join some other major central banks in looking to remove policy accommodation."
The market was reluctant to push the kiwi lower "even with the US-North Korea sabre-rattling in the background," he said.
The kiwi was trading at 80.50 yen from 80.42 yen late yesterday and at 4.8892 yuan from 4.8950 yuan. It traded at 62.33 euro cents from 62.31 cents, was at 56.36 British pence from 56.34 pence and at 92.88 Australian cents from 92.91 cents.