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NZ Dollar Holds Firm In Mixed Session

Contributor:
Fuseworks Media
Fuseworks Media

Wellington, May 13 NZPA - The New Zealand dollar had an up and down day but managed to finish higher than yesterday.

By 5pm the NZ dollar was buying US60.58c, up from US59.97c at the same time yesterday.

The NZ dollar dipped in the wake of the Reserve Bank of New Zealand's financial stability report today, which chided banks for not lowering interest rates more and was read as signalling scope for further cuts in the official cash rate.

"That put some selling pressure on the currency and we saw it knocked down from US60.75c to around US60.40c," BNZ Capital currency strategist Danica Hampton said.

Then an article in the Financial Times suggested the rating of the United States economy was in jeopardy. This created a bout of US dollar weakness and the NZ dollar rose toward US61c.

The focus then shifted to Chinese trade and industrial production data, which knocked the NZ dollar off its highs as traders bought yen and risk aversion increased.

China's factory output growth slowed in April, providing fresh evidence a day after poor export data that recovery in the world's third-largest economy is not yet on a rock-solid footing, Reuters reported.

The NZ dollar was little changed by 5pm at 58.44 yen from 58.35 yesterday.

The NZ dollar rose to 0.4433 euro from 0.4412, while the trade weighted index rose to 58.52 from 58.29.

The focus is turning to retail sales data due on Friday.

NZPA WGT Reuters pjg gt

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