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NZ Dollar Consolidates In Range, Awaits MPs

Contributor:
Fuseworks Media
Fuseworks Media

Wellington, June 5 NZPA - The New Zealand dollar showed some composure on Friday, closing near where it opened.

Around 5pm today the NZ dollar was buying US63.48c, little changed from US63.42 at 8am, and up from US62.97c at 5pm yesterday.

Dealers said the currency traded in a tight range in its domestic session after slipping to a week low of US62.20c overnight.

BNZ Capital currency strategist Danica Hampton said the unwinding of currency hedges for the proposed deal between Chinalco and Rio Tinto sent the Australian dollar and the British pound sharply lower.

"... so of course the NZD trailed in their wake."

But it found support and weakness in the US dollar in the Asian session helped with that. The Asia session was relatively quiet ahead of a US Labor Department report.

Attention is turning to the Reserve Bank of New Zealand's monetary policy statement next Thursday.

"We can't rule out the possibility that the bank decides to shock the market with a further rate cut in what ultimately would likely prove another unsuccessful attempt to drive down longer-term interest rates or, more especially the strengthening NZ dollar," Deutsche Bank said today.

The NZ dollar was buying 0.4475 euros at 5pm from 0.4447 yesterday, was up to 61.42 yen from 60.56, and lifted to $A78.93c from A78.70c. The trade weighted index was 59.93 from 59.44.

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