Dollar trades near 3-year low after failing to break below 74 US cents
Kiwi traded at 74.31 US cents as at 5 pm in Wellington.
The New Zealand dollar traded near a three-year low after failing to push below 74 US cents, a level it hasn't breached since late 2011.
The kiwi traded at 74.31 US cents as at 5 pm in Wellington, from 74.50 cents in New York on Friday. Earlier, it fell as low as 74.07 cents. The trade-weighted index was at 76.92, down from 77.24 on Friday.
A regional holiday in Auckland and the absence of traders in Australia, which celebrated Australia Day, kept trading subdued and made it harder for the kiwi to break through key support levels, said Mark Johnson, senior dealer at OMF. Traders are awaiting the Reserve Bank's interest rate review on Thursday for any change in language about the prospect of interest rate hikes given consumer prices are falling.
"The market may have another crack at it (74 US cents) later in the week if there is any shift in the rhetoric from the RB," Johnson said. "If that gives way it will really open up some downside for the kiwi."
The New Zealand dollar traded at 66.46 euro cents, up from 66.07 cents on Friday. The euro zone currency sank to an 11-year low against the greenback after Greece's Syriza party won general elections on a ticket that included rejecting the austerity measures imposed as a condition of its financial bailout. The euro has since rebounded. The dollar index, which measures the greenback against a basket of currencies, was recently at 95.138, having surged to an 11-year high of 95.481.
New Zealand's central bank is expected to keep its benchmark rate at 3.5 percent when it announces its decision on Thursday, although some economists expect the bank to remove its tightening bias. A US Federal Reserve policy meeting concludes shortly before the Reserve Bank's statement is released. The kiwi didn't move much after the BNZ-BusinessNZ Performance of Services Index rose 1.8 points to 56.5 in December from November on a scale where 50 divides expansion from contraction.
The New Zealand dollar rose to 94.27 Australian cents from 93.57 cents on Friday and slipped to 49.54 British pence from 50.02 pence.
The local currency traded at 87.38 yen from 88.89 yen on Friday.
(BusinessDesk)
Jonathan Underhill
Mon, 26 Jan 2015
Mon, 26 Jan 2015
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Dollar trades near 3-year low after failing to break below 74 US cents
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