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NZ Dollar Static Ahead Of Interest Rate Decision

Contributor:
Fuseworks Media
Fuseworks Media

Wellington, July 22 NZPA - The New Zealand dollar held steady overnight as traders sat on the sidelines ahead of the Reserve Bank's crucial interest rate decision on Thursday.

At 9am, the kiwi was buying US76.17c, little changed its level in the last 24 hours.

It lost ground on other cross rates, falling to A77.96c from A78.07c at yesterday's close.

The local market is on tenterhooks ahead of Thursday's Reserve Bank decision on whether it will start its rate cutting phase.

The market is divided whether it will begin tomorrow or hold fire until September.

A cut will see downward pressure on the kiwi.

The trade weighted index was on 67.30 against 67.45 at 5pm yesterday.

The US dollar fell as fears of woes in the US financial sector persisted even as Bank of America reported better-than-expected results.

The greenback gained earlier against the yen after Bank of America's second-quarter earnings beat analysts' forecast.

But investors remained wary ahead of a flurry of bank earnings due this week, including Wachovia.

The market also focused on a rescue plan for troubled US mortgage finance giants Fannie Mae and Freddie Mac.

"There was a lack of follow-through buying in the dollar after the Bank of America results," said Steven Butler, director of foreign exchange trading at Scotia Capital in Toronto.

The euro was last up 0.3 percent to $US1.5898, below last week's record high of $1.6037 according to Reuters Dealing.

NZPA WGT Reuters sml kn

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