Kiwi little changed as RBA, RBNZ rate reviews awaited
The kiwi was little changed against its transTasman counterpart amid expectations the Reserve Bank of Australia will cut its benchmark interest rate this week and New Zealand's central bank will keep rates unchanged, narrowing the premium offered across the ditch.
The New Zealand dollar traded at 78.59 Australian cents from 78.65 cents in New York on Friday. It was at 82.04 US cents from 81.98 cents on Friday.
The RBA will cut its cash rate a quarter point to 3% tomorrow, ahead of economic growth figures for the third quarter on Wednesday expected to show the economy held to its 0.6% expansion.
The Reserve Bank here releases its monetary policy statement on Thursday, the first under new governor Graeme Wheeler, who will keep rates unchanged even in the face of weaker third-quarter data, economists predict.
"A sluggish local economy certainly gives the bank reason to sound more dovish relative to September," says Mike Jones, strategist at Bank of New Zealand.
Helping support both the Australian and New Zealand dollars, China's official PMI was released over the weekend, with a stronger-than-expected reading of 50.8, showing manufacturing in the biggest and second-biggest market for Australia and New Zealand is picking up pace.
The kiwi rose to 67.66 yen from 67.58 yen and the trade-weighted index rose to 73.45 from 73.39. It rose to 63.22 euro cents from 63.10 cents and traded at 51.24 British pence from 51.21 pence.