The New Zealand dollar slipped as investors weigh the negative signs of a slowing economy against the lure of rising interest rates.
The kiwi edged lower to 86.89 US cents at 8am in Wellington, from 87.12 cents at 5pm yesterday. The trade-weighted index declined to 80.91 from 81.05 yesterday.
The New Zealand dollar fell last week following more upbeat testimony from Federal Reserve chair Janet Yellen which boosted the greenback, and as a drop in dairy prices and slower-than-expected inflation dented demand for the local currency. Still, the Reserve Bank is expected on Thursday to hike interest rates for a fourth time this year, increasing the lure of the kiwi in a global environment of low interest rates.
"It's hovering, it's not inclined to go anywhere," said Peter Cavanaugh, client adviser at Bancorp Treasury Services. "Everybody is in agreement that sometime in the future the kiwi is going to be lower but nobody is prepared to take that first step and say when, and equally, no one is prepared to make that first step and push it down.
"We have seen the New Zealand dollar run into tremendous support at these levels," Cavanaugh said. "At the moment, the higher New Zealand dollar shows how much cash is king. It's global cash, and cash looking for yield and looking for return."
Reserve Bank deputy governor Grant Spencer is scheduled to speak about prudential regulation at 5pm.
In Australia, Reserve Bank of Australia assistant governor financial markets Guy Debelle is speaking at an investors forum in Sydney and governor Glenn Stevens is speaking at the Anika Foundation luncheon in Sydney.
The New Zealand dollar edged lower to 92.67 Australian cents from 92.72 cents yesterday, weakened to 64.27 euro cents from 64.32 cents, declined to 50.88 British pence from 50.95 pence and slipped to 88.09 yen from 88.18 yen.
This article is tagged with the following keywords. Find out more about MyNBR Tags
- Xero directors Drury, Winkler and Morgan cash in on 35% share price rally
- Auckland Council ignores free funding advice, chooses to spend $500k
- Ralph Norris spells out reasons for Fonterra board departure
- Dimension Data restructures, top salesman leaves
- China pips Oz as NZ's top annual export destination
Most listened to
- Auckland Councillor Chris Darby on the Council's alternative funding report
- Nevil Gibson discusses his latest Editor's Insight on oil prices
- Campbell Gibson, Nick Grant and Chelsea Armitage chat about the inner workings of New Zealand media
- Paul Brislen discusses the 'snake oil' sales tactics of SalesConcepts
- Fonterra chief executive Theo Spierings reveals his ambitious China plan
- UDC Finance chief executive Wayne Percival talks about the company's profit
- Hamish McNicol discusses the latest court stories
- Trilogy International CEO Angela Buglass reviews another bumper result
- Eroad CEO Steven Newman talks about his company's revenue increase
- What do the latest terrorism attacks in Mali and Israel mean? Nathan Smith discusses the latest foreign affairs news
- NZ Windfarms departing director Michael Stiassny speaks out after board exit
- James Mayo talks about SOS Hydration's growth plans after Snowball offer