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NZ Dollar Firm As Investors Disregard Rbnz Warning

Contributor:
Fuseworks Media
Fuseworks Media

Wellington, June 18 NZPA - The New Zealand dollar consolidated in a fairly narrow range in its domestic session after rising on Wednesday night.

By 5pm the NZ dollar was buying US63.02c, little changed from US63.05c at 5pm yesterday.

Reserve Bank of New Zealand (RBNZ) governor Alan Bollard's attempts to talk the NZ dollar down appeared to have fallen on deaf ears, ANZ said.

On Wednesday Dr Bollard said "if markets are buying the NZ dollar on the expectation of a strong recovery they may end up being disappointed".

ANZ said a gain by the NZ dollar on Wednesday night was largely driven by US dollar weakness, a sign the market was not so much buying a New Zealand recovery story but a US dollar weakness one.

"Until that sentiment completely turns around, the RBNZ (and exporters) will continue to be frustrated by a higher NZ dollar," ANZ said.

The US dollar was also trading in a range in Asia today as investors started hunkering down before a Federal Reserve meeting next week. Investors are trying to guess the US central bank's reaction to higher long term US interest rates.

The NZ dollar fell to 60.30 yen from 60.88 yen yesterday, and to 0.4523 euro from 0.4546 .

Against the Australian dollar, the NZ dollar reached a fortnight high A79.93c on Wednesday night but eased to A79.59c by today's close from A79.52c yesterday.

The trade weighted index was 59.82 from 59.91 yesterday.

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