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NZ Dollar Ends Lower As Focus Turns To Rate Decision

Contributor:
Fuseworks Media
Fuseworks Media

Wellington, Oct 27 NZPA - The New Zealand dollar settled around levels it was at a week ago today as the local market returned from a holiday weekend and looked ahead to Thursday's rate decision.

By 5pm the NZ dollar was buying US74.76c. It fell on Monday night when the greenback strengthened and was US74.62c at 8am from US75.61c at 5pm on Friday.

Westpac said the NZ dollar peaked at US76.25c last week and any break of that level will keep the bullish trend intact. It has support at US74.50c.

Westpac said that many asset classes that have rallied since March began stalling around October 21.

"Whether this is the beginning of a major reversal, or simply a multi-day affair, is too early to say with conviction," Westpac said.

Against the Australian dollar, the NZ dollar was A81.37c at 5pm from A81.42c on Friday evening. The trade weighted index slipped to 67.22 at 5pm from 67.50 at 5pm on Friday.

Rankin Treasury noted that the Bank of Canada has stated that its interest rates would be held unchanged until the end of 2010, while the Reserve Bank of Australia has confirmed its recent rate increase.

The Reserve Bank of New Zealand (RBNZ) reviews its official cash rate, currently at 2.5 percent, on Thursday.

"This week the RBNZ will be watched closely, with all the signs that they are still in the Canadian camp," Rankin Treasury said.

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