By Rebecca Howard
Sept. 24 (BusinessDesk) - The New Zealand dollar continued to recover as investors take positions ahead of tomorrow’s rate decision by the Reserve Bank of New Zealand.
The kiwi was trading at 62.91 US cents at 8:10 am in Wellington from 62.74 cents at 5:05pm yesterday. The trade-weighted index was at 70.08 from 69.84.
Kiwibank senior portfolio manager Ross Weston said the market is extremely short the New Zealand dollar, betting that it will continue moving lower.
However, some investors will be pulling back a bit from that position on the off-chance the central bank is more hawkish than expected in tomorrow’s review.
“You always get a portion of the market that’s a little bit more skittery,” he said.
The Reserve Bank is expected to keep rates on hold at 1 percent but signal more easing to come. All 16 economists polled by Bloomberg expect the rate to remain on hold this week. Market pricing points to around a 25 percent chance of a cut. Most economists, however, are expecting another rate cut in November.
“Some people will be taking chips off the table ahead of tomorrow, locking in some of their gains,” said Weston.
Ahead of the rate decision, Japan’s manufacturing purchasing managers index will garner attention today.
The kiwi was trading at 92.90 Australian cents from 92.55, at 50.60 British pence from 50.25, at 57.24 euro cents from 56.90, at 67.61 yen from 67.57 and at 4.4772 Chinese yuan from 4.4617.