Kiwi falls after governor keeps markets guessing on FX intervention
The central bank publishes figures showing it sold a net $256m last month, its biggest monthly sale in five years.
The New Zealand dollar fell after Reserve Bank governor Graeme Wheeler said he is prepared to keep intervening in foreign exchange markets to keep a lid on the local currency.
The kiwi fell to 81.15 US cents at 5pm in Wellington from 81.31 cents at 8am, just before the release of Wheeler's speech, though up from 80.68 cents yesterday. The trade-weighted index slipped to 76.41 from 76.57 yesterday.
Mr Wheeler told the Institute of Directors he is "prepared to scale up our foreign exchange activities if we see opportunities to have greater influence".
The central bank published figures showing it sold a net $256 million last month, its biggest monthly sale in five years, having previously signalled it has been intervening in currency markets in a bid to take the top off rallies.
"He wants to restore two-way pressure in the market and make it aware the Reserve Bank is awake and is watching things," says Derek Rankin, a director at Rankin Treasury Advisory. "To give him credit, he's saying he can't change the trend but is going to influence what the market is thinking at times."
Mr Rankin says the market is rallying behind the greenback on the expectation the Federal Reserve will start tapering off its $85 billion a month asset purchase programme this year, but may have become overly optimistic.
He does not expect the Fed to start unwinding its quantitative easing programme until September at the earliest.
The kiwi dropped to 83.76 Australian cents from 84.39 cents yesterday after upbeat construction figures offset any fears raised from a weaker than expected capital expenditure data.
The local currency fell to 81.89 yen from 82.60 yen yesterday and declined to 62.59 euro cents from 62.77 cents. It slipped to 53.57 British pence from 53.70 pence.
(BusinessDesk)
Paul McBeth
Thu, 30 May 2013
Thu, 30 May 2013
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Kiwi falls after governor keeps markets guessing on FX intervention
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