NZ dollar gains as RBNZ rate decision looms
By Paul McBeth
Sept. 9 (BusinessDesk) - The New Zealand dollar rose as local markets wait for next week’s monetary policy statement.
The kiwi dollar rose to 83.47 U.S. cents at 5pm from 83.09 cents at 8am and was up from 83.27 cents yesterday.
Reserve Bank Governor Alan Bollard is expected to keep the official cash rate on hold at 2.5% next week in what will be closely followed as investors try to penetrate the central bank’s thinking on where interest rates will be going.
He had previously flagged a 50 basis points hike this year as he moved to unwind the emergency cut he made in response to the February earthquake, though recent international tremors will put that on hold.
“The domestic data is still pretty good, the question is whether they want to replay the same sort of message” as in July, said Chris Tennent-Brown, foreign exchange economist at Commonwealth Bank of Australia in Sydney.
The kiwi dollar’s trading range has “narrowed this week” as investors continue to focus on global issues, he said.
The kiwi dollar got a small fillip from President Barack Obama’s US$447 billion plan to encourage new jobs, which is tilted in favour of the Republican Party’s favoured tax cut prescription, shrugging off weak retail spending data as the Rugby World Cup gets underway.
Finance ministers and central banks from the Group of Seven nations meet over the weekend, and markets will be looking to see if they decide to proceed with coordinated currency market intervention after the Swiss National Bank set a ceiling for the franc earlier this week.
The kiwi dollar rose to 78.64 Australian cents from 78.58 cents yesterday, and gained to 64.66 yen from 64.41 yen yesterday.
It gained to 60 euro cents from 59.17 cents and rose to 72.38 on the trade-weighted index from 71.99 yesterday. It advanced to 52.25 pence from 52.18 pence yesterday.