NZ dollar gains ahead of Wheeler speech which may hint at rate-cut prospects

Tuesday 23rd August 2016

The New Zealand dollar rose ahead of a speech by Reserve Bank governor Graeme Wheeler which may hint at the timing of further easing, with at least one further cut expected this year.

The kiwi rose to 72.73 US cents at 8am in Wellington from 72.16 US cents late yesterday. The trade-weighted index rose to 77.03 from 76.64.

Wheeler is scheduled to give a speech at 9am this morning on the challenges of monetary policy in volatile times. He used an unscheduled economic update last month to signal the bank's intentions to the market before cutting the official cash rate a quarter point to 2 percent on Aug. 11 and saying further easing will be required and economic data would be closely watched.

"We continue to see the prospect of 25 basis point rate cuts at the November and February meetings, taking the OCR to a trough of 1.50 percent," said Kymberly Martin, senior market strategist at Bank of New Zealand.

The local currency rose to 95.28 Australian cents from 95 cents late yesterday and rose to 4.8347 yuan from 4.8072 yuan. It rose to 64.21 euro cents from 63.96 cents, was little changed at 55.34 British pence and gained to 72.94 yen from 72.77 yen.

BusinessDesk.co.nz

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