Sharechat Logo

NZ dollar holds near 2.5 year high vs. Australian dollar

Tuesday 19th February 2013

Text too small?

The New Zealand dollar traded near a 2 ½ year high against its Australian counterpart before minutes of the Reserve Bank of Australia's last policy meeting that may hint at further easing across the Tasman.

The kiwi traded at 82.05 Australian cents, little changed from 5 pm in Wellington yesterday, having reached as high as 82.33 cents at the end of last week. The local currency rose to 84.51 US cents from 84.40 cents in the absence of US traders taking the President's Day holiday.

The RBA held its cash rate unchanged at 3 percent at is last review on Feb. 6, having lowered the benchmark rate to the lowest level since the wake of the global financial crisis in a series of cuts starting in late 2011. Traders expect 33 basis points of cuts over the next 12 months based on the overnight interest swap curve, which would narrow the gap with New Zealand's 2.5 percent official cash rate.

"If these serve to increase market expectations for future RBA easing, this would likely push the NZD/AUD higher," said Kymberly Martin, market strategist at Bank of New Zealand, in her morning note.

"Over the medium-term we continue to see steady upside to NZD/AUD, as the RBA likely cuts further than currently priced by the market, and the RBNZ begins to steadily withdraw monetary stimulus," she said.

The New Zealand dollar traded at 63.29 euro cents from 63.32 cents late yesterday after European Central Bank President Mario Draghi warned of "further weakness" in the region's economy.

Data released last week showed that the EU economy contracted more than expected in the fourth quarter, shrinking 0.6 percent from the previous three months.

The kiwi traded little changed at 79.42 yen and rose to 54.64 British pence from 54.53 pence.

The trade-weighted index was at 76.96 from 76.93 yesterday.

 

BusinessDesk.co.nz

  General Finance Advertising    

Comments from our readers

No comments yet

Add your comment:
Your name:
Your email:
Not displayed to the public
Comment:
Comments to Sharechat go through an approval process. Comments which are defamatory, abusive or in some way deemed inappropriate will not be approved. It is allowable to use some form of non-de-plume for your name, however we recommend real email addresses are used. Comments from free email addresses such as Gmail, Yahoo, Hotmail, etc may not be approved.

Related News:

Delegat continues to invest after record year
Kiwibank's annual profit eases as fee income drops
TIL lifts operating earnings, watching for slowdown
Vector profit slides 44% on struggling HRV writedown
Steel & Tube returns to the black but says margins are squeezed
Skellerup reports record net profit powered by industrial division
23rd August 2019 Morning Report
NZ dollar falls against pound on Brexit cheer
MARKET CLOSE: NZ shares gain as Ebos, Air NZ earnings meet expectations
NZ dollar falls as China's yuan depreciates

IRG See IRG research reports