NZ dollar gains after RBNZ fails to add to housing market curbs
Broad US dollar weakness and a lift in oil also bolstered the kiwi.
The New Zealand dollar gained after the Reserve Bank failed to add any new measures to curb housing market strength yesterday as some had expected, prompting a pull-back in bets for lower interest rates.
The kiwi rose to 68.24c at 8am in Wellington, from 67.92c at 5pm yesterday. The trade-weighted index advanced to 72.68 from 72.49.
The local currency has jumped 1% since the Reserve Bank published its six-monthly financial stability report, in which said it's "closely monitoring" developments in the housing market but stopped short of detailing plans for new measures.
That disappointed some traders who had interpreted comments by Finance Minister Bill English the previous day as a signal the Reserve Bank would announce further housing market restrictions which they anticipated would free up Governor Graeme Wheeler to reduce interest rates further.
"While most didn't expect any fresh measures, the previous day the market sold the New Zealand dollar after a published interview with the Finance Minister raised the chance of measures being introduced. We saw the spike up in the New Zealand dollar as an unwinding of that selling," Bank of New Zealand currency strategist Jason Wong says.
"The New Zealand dollar would have likely risen even further had the bank not indicated further macro-prudential measures were in its sights, although it was an open-ended suggestion with no timetable in mind."
Broad US dollar weakness and a lift in oil had also bolstered the kiwi, Mr Wong says.
Today, traders will be closely watching a pre-Budget speech by Mr English to a Wellington Chamber of Commerce lunch. Data on food prices and the BNZ-BusinessNZ Performance of Manufacturing Index are also due out.
The New Zealand dollar rose to 92.50Ac from 92.38Ac, gained to 47.24 British pence from 47.01 pence, advanced to 74.01 yen from 73.88 yen, increased to 4.4295 yuan from 4.4235 yuan, and edged up to 59.72 euro c from 59.67 euro c.
(BusinessDesk)
Tina Morrison
Thu, 12 May 2016
Thu, 12 May 2016
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NZ dollar gains after RBNZ fails to add to housing market curbs
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