Kiwi holds near 2½-year high against Australian dollar before RBA minutes

The New Zealand dollar traded near a 2½ 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 February 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," says 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 says.

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)


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NZ Market Snapshot

Forex

Sym Price Change
USD 0.6552 -0.0048 -0.73%
AUD 0.9004 -0.0047 -0.52%
EUR 0.5981 -0.0053 -0.88%
GBP 0.4207 -0.0023 -0.54%
HKD 5.0790 -0.0371 -0.73%
JPY 81.4020 -0.4970 -0.61%

Commods

Commodity Price Change Time
Gold Index 1088.6 -4.010 2015-07-30T00:
Oil Brent 53.3 -0.070 2015-07-30T00:
Oil Nymex 48.5 -0.250 2015-07-30T00:
Silver Index 14.7 -0.040 2015-07-30T00:

Indices

Symbol Open High Last %
NZX 50 5891.9 5937.6 5891.9 0.49%
NASDAQ 5100.3 5135.6 5111.7 0.33%
DAX 11271.3 11298.1 11257.1 0.00%
DJI 17743.2 17761.2 17751.4 -0.03%
FTSE 6668.9 6688.1 6668.9 -0.15%
HKSE 24650.9 24661.2 24498.0 0.56%
NI225 20506.5 20585.2 20522.8 0.30%