Sharechat Logo

NZ dollar holds above 88 US cents, may test record high this week

Monday 14th July 2014

Text too small?

The New Zealand dollar held above 88 US cents and may test its post-float high this week as traders prepare for testimony from US Federal Reserve chair Janet Yellen and local data that's expected to confirm inflation is accelerating.

The kiwi traded at 88.03 USA cents at 8am in Wellington, little changed from the New York and Wellington closes on Friday last week. The trade-weighted index  was at 81.90 from 81.89.

Second-quarter inflation figures due on Wednesday are expected to show the consumer price index sped to 0.4 percent last quarter for an annual pace of 1.8 percent, according to a Reuters survey. That would be a tad faster than the Reserve Bank forecast last month and keep intact expectations that governor Graeme Wheeler will raise interest rates again as soon as this month, lifting the official cash rate to 3.5 percent.

Yellen is scheduled to deliver her semi-annual policy testimony to the Senate Banking Committee tomorrow and address the House Financial Services Committee the following day, after minutes of the June Fed meeting showed that policy makers are planning to end their monthly bond-buying programme after the October gathering.

"The price action tells you there's fairly decent demand" for the kiwi, said Sam Tuck, senior FX strategist at ANZ New Zealand. "It has been unable to break through the psychological level of 88.42, the post-float high. It's a sign we really need to make new ground. The catalyst may come from  Q2 CPI or Yellen."

ANZ New Zealand's CPI forecasts match the market consensus, "which would be consistent with the RBNZ," Tuck said.

He sees the kiwi trading in a range of 87.90 US cents to 88.35 cents in the next 24 hours and a range of 87.60 cents to 89 cents in the week.

"It has been a gradual grind higher since the June MPS" for the kiwi, he said. "It is stubbornly bid."

The local currency traded at 64.73 euro cents, little changed from the New York close, and little changed at 51.41 British pence. The New Zealand dollar was almost unchanged at 93.85 Australian cents and traded at 89.24 yen.

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:

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

IRG See IRG research reports