The New Zealand dollar gained against the Australian dollar after Australia's central bank warned of growing risks in the housing market in its latest minutes.
The kiwi rose to 91.37 Australian cents from 91.14 cents late yesterday. It was at 70.47 US cents from 70.37 cents.
According to the Reserve Bank of Australia, "recent data continued to suggest that there had been a build-up of risks associated with the housing market." Also, "borrowing for housing by investors had picked up over recent months and growth in household debt had been faster than that in household income." The RBA kept rates on hold at 1.5 percent at its March 7 meeting and is widely expected to stand pat for the remainder of this year.
Westpac Banking Corp senior FX strategist Imre Speizer said the NZD/AUD cross rate "was starting to look very stretched on the downside". He noted it has fallen around 6 NZ cents since early February and may have pushed higher given "much of the selling has been done already ... it's got signs of fatigue about it."
Speizer said there is little on the immediate horizon that will push the kiwi much higher against the Aussie, in particular given that prices on the GlobalDairyTrade platform are expected to drop for a third straight auction tonight as supply outstrips demand. Also, the market is widely expecting the Reserve Bank of New Zealand to keep rates on hold at a record low 1.75 percent on Thursday and reiterate that they are likely to stay low for some time to come.
"Our expectation is that the RBNZ is going to sound like it did in February and the dairy auction is going to show that prices fall 6 percent," said Speizer. As a result, the kiwi will likely stick to a tight range. Any surprises either way, however, would have an impact.
The kiwi pared some of the gains it made after UK Prime Minister Theresa May announced the date she will trigger Article 50 that puts in motion her nation's departure from the European Union and was trading at 56.98 pence versus 56.82 pence late yesterday. It touched 57.04 pence early in Wellington.
The trade-weighted index was at 76.46 from 76.32 late yesterday and the kiwi traded at 65.51 euro cents from 65.40 euro cents. It was at 4.8673 yuan from 4.8582 yuan and 79.45 yen from 79.18 yen.
The two-year swap rate rose 1 basis point to 2.27 while the 10-year swaps fell 1 basis point to 3.46 percent.
This article is tagged with the following keywords. Find out more about MyNBR Tags
- Vodafone: TeamTalk deal isn’t about stiffing Spark
- OPINION: Time to wind up the NZ Super Fund
- Yili-owned Oceania Dairy opens stage two of South Island plant
- A2 'shoots the lights out' with a 30% March quarter share price rise
- NZ dollar little changed as Trump's healthcare stumble points to policy paralysis
Most listened to
- Vodafone CEO Russell Stanners and TeamTalk CEO Andrew Miller on their Farmside deal
- Fonterra and Intelact have locked legal horns again over the “Farm Source” brand, NBR’s Campbell Gibson reports
- Paul Brislen on the future of the telco dispute service
- Craigs' Mark Lister on the best and worst share market performers
- Flavell’s courteous and dignified invitation to Labour to talk is in sharp contrast to Labour’s petulant attitude of entitlement