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NZ Dollar Eases Against Aussie Following RBA Rate Cut

Contributor:
Fuseworks Media
Fuseworks Media

Wellington, Sept 2 NZPA - The New Zealand dollar remained stuck below US70c today, and eased against the Australian dollar despite a Reserve Bank of Australia interest rate cut.

By 5pm, the kiwi was at US69.30c from US69.59c late yesterday afternoon. Against the aussie, it slipped to A81.25c from A81.55c.

"Certainly for the last part of the session, it's been dictated by moves in the Australian dollar after the RBA announcement," said Murray Hindley, ANZ Institutional Bank chief foreign exchange dealer.

"The RBA was certainly less dovish than the market was expecting, so obviously we've seen Aussie strengthen as a result."

The kiwi was struggling to regain the US70c level it last traded at on Friday.

The Aussie recovered from an earlier one-year low against the US dollar after the RBA cut its official cash rate by 25 basis points to 7 percent, as expected, and gave no signal of any further rate cuts.

The US dollar hit an eight-month high against a basket of major currencies, getting a boost from a sharp drop in oil prices on expectations that Hurricane Gustav's damage to US energy facilities may be less than feared.

Sterling and the euro fell further after European Union leaders agreed on Monday to postpone talks on a new EU-Russia partnership until Moscow withdraws its troops to pre-conflict positions in Georgia, traders said.

Trading conditions were less liquid than usual overnight as US markets were closed for the Labour Day holiday.

NZPA WGT Reuters mfc gt

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