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NZ Dollar Trades In Range Head Of RBNZ Decision

Contributor:
Fuseworks Media
Fuseworks Media

Wellington, July 27 NZPA - The New Zealand dollar traded in a range below the US66c figure today as the focus turned to the Reserve Bank of New Zealand's interest rate decision on Thursday.

The NZ dollar was US65.70c at 5pm from US65.77c at 8am and US65.52c at 5pm Friday.

It traded as high as US65.82c today after a quiet weekend.

The New Zealand Manufacturers and Exporters Association (NZMEA) today called on the central bank to cut the official cash rate on Thursday to put downward pressure on the currency.

Economists do not expect the call to be answered.

Fifteen of 16 analysts polled by Reuters expect the central bank to keep the official cash rate unchanged at 2.5 percent.

But there is a debate going on in the background about the impact of the high NZ dollar on the prospects for an export-led recovery.

"Any change in the accompanying statement from June 11 could have dramatic implications for the NZ yield curve and NZ dollar," said Westpac in a commentary.

Derek Rankin of Rankin Treasury pointed out that the currency was not as high against the Australian dollar so exporters to Australia were not under as much pressure.

The NZ dollar was lower at A80.06c from A80.40c on Friday. The Australian dollar rose to US82.03c from US81.46c on Friday.

Westpac sees momentum toward A79c this week. Investors are also waiting for direction from a speech by the Reserve Bank of Australia governor on Tuesday.

The NZ dollar lifted to 62.30 yen from 62.12 at 5pm Friday, and was little changed against the European currency at 0.4615 euro from 0.4628 on Friday.

The trade weighted index rose to 61.40 at 5pm from 61.42 on Friday.

Major currencies were little changed in Asia today ahead of US gross domestic product numbers on Friday US time.

Equity markets continue to perform well, which is helping the NZ dollar.

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