Thursday 13th June 2013
|Text too small?|
The New Zealand dollar rose before the Reserve Bank's policy statement as investors weighed the prospects for a gradual reduction in momentary stimulus in the US and the greenback dropped against most major currencies.
The kiwi gained to 79.59 US cents, from 78.76 cents at 5pm yesterday. The trade-weighted index edged up to 74.06 from 73.45 yesterday.
The dollar index, which measures the greenback against six major trading partners, dropped to its lowest in four months as traders ponder the end of the Federal Reserve's quantitative easing. The Fed is expected to start reducing its US$85 billion-a-month asset purchase programme as the world's largest economy shows sustained improvement.
"The US dollar weakened somewhat. There's a bit of concern about when the Federal Reserve is going to start their bond buying tapering," said Michael Johnston, a senior trader at HiFX. "The US dollar has strengthened quite substantially in recent times and I don't necessarily think the end is over."
A report in the US on Friday is expected to show retail sales grew 0.4 percent in May from 0.1 percent, according to a Reuters survey.
In New Zealand, all eyes are on Reserve Bank Governor Graeme Wheeler who is expected at 9am to keep the official cash rate at a record low 2.5 percent. Traders will be looking to see whether he's changed his forecast track for the 90-day bank bill rate, seen as a proxy for the cash rate.
Traders yesterday increased their expectations for interest rate hikes. They have priced in 36 basis points of increases in the coming year, up from 22 basis points at the start of this week, according to the Overnight Index Swap curve.
The New Zealand dollar gained to 84.04 Australian cents, from 83.49 cents yesterday ahead of a report today on Australian employment.
The local currency jumped to 76.50 yen from 75.99 yen, rose to 59.72 euro cents from 59.18 cents and edged up 50.79 British pence from 50.39 pence.
No comments yet
NZ dollar headed for 1.3% weekly gain on expectations of a Fed rate cut
RBNZ knock-back gives Resolution chance to low-ball AMP - Jarden
Rail hubs may not boost Napier Port log trade
O'Connor looks to overhaul Biosecurity Act, improve animal tracing
Denton Morrell undefended at liquidation hearing
Contact steam to heat Norske Skog pellet business secured
Air NZ to amend booking engine after lawyer’s complaint
Ross McEwan to take helm at NAB
KPMG says bank capital proposals will wreck havoc on dairy farmers
Mild weather saps Vector's June-qtr volumes