NZ dollar slips as traders eye looming Reserve Bank meeting
The New Zealand dollar fell as traders became wary the Reserve Bank may emphasise its willingness to ease monetary policy when it meets this week.
The New Zealand dollar fell, lagging behind other commodity currencies, as traders became wary the Reserve Bank may emphasise its willingness to ease monetary policy when it meets this week.
The kiwi slid to 64.76USc at 8am in Wellington, from 64.90USc at the New York close and 65.24USc at 5pm on Friday. The trade-weighted index fell to 71.51 from 71.98 on Friday.
The US dollar index, which measures the greenback against a basket of currencies, gained as global equities and oil prices improved, renewing market appetite for riskier assets. However, the kiwi lagged behind other commodity-linked currencies as traders eye this week's Reserve Bank meeting, where governor Graeme Wheeler's bias may be leaning more toward future interest rate cuts amid continuing weak inflation.
"The New Zealand dollar eased back under 0.65USc despite markets boosting equities, commodities and yield to end the week on a positive note," ANZ Bank New Zealand senior foreign exchange strategist Sam Tuck said. "Markets are looking forward to this week's Reserve Bank statement and markets are discussing a central bank return to an explicit easing bias."
However, he said the Reserve Bank already has an easing bias, given it communicated only one-sided risks in its December statement by warning it would reduce rates if circumstances warrant.
"We expect the Reserve Bank to remain on the same footing, watching with a cautious outlook," Mr Tuck said.
The kiwi will probably trade between 64.60USc and 65.80USc today, he said. Wellington has a public holiday today.
The New Zealand dollar fell to 92.46Ac from 93.17Ac on Friday, ahead of a report on Australian business confidence today.
The kiwi slid to 59.95 euro cents from 60.16 cents on Friday, dropped to 45.34 British pence from 45.91 pence, declined to 4.2604 yuan from 4.2916 yuan, and was unchanged at 76.84 yen.
(BusinessDesk)
Tina Morrison
Mon, 25 Jan 2016
Mon, 25 Jan 2016
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NZ dollar slips as traders eye looming Reserve Bank meeting
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