The New Zealand dollar traded in a fairly narrow range today against a backdrop of settled equity markets as caution about the global economic outlook continued.By 5pm the NZ dollar had drifted lower to 69.18USc from 69.33USc at 8am but it was still above
The New Zealand dollar traded in a fairly narrow range today against a backdrop of settled equity markets as caution about the global economic outlook continued.
By 5pm the NZ dollar had drifted lower to 69.18USc from 69.33USc at 8am but it was still above the 68.85USc at 5pm yesterday.
It gained on Wednesday night against a weakening greenback after comments from the Reserve Bank of Australia yesterday spurred traders' appetite for high-yielding currencies.
Weaker Fonterra online auction results today did little to dent the fortunes of the NZ dollar though it and a sluggish Australian dollar gave the local currency a downward bias.
The globalDairyTrade TWI index of prices in the overnight auction was down 13.7% from the previous month. This is the third monthly fall but prices are up 61% year on year.
"Along with data released over the past few weeks for confidence, consents, house sales, we see today's result as reinforcing our view that the Reserve Bank of New Zealand will pause in its process of policy normalisation before the end of the year," Goldman Sachs JBWere chief economist Philip Borkin said.
"This potentially could come earlier than our current view of following 100 basis point of tightening, although we are sticking to that view for the time being."
The RBNZ hiked the official cash rate by 25 basis points to 2.75% in June, having kept the rate unchanged at eight reviews.
The RBA had held its key interest rate at 4.5% yesterday, saying policy was appropriate given caution in global markets even as it remained optimistic about the outlook for Asia and the domestic economy.
The NZ dollar slipped to 81.60Ac at 5pm from 81.88Ac at the same time yesterday, but gained to ¥60.45 from ¥60.35, and was slightly up to €0.5493.
The trade weighted index was up to 66.09 around 5pm from 65.95 yesterday.
