The New Zealand dollar traded in a narrow range today, as investor attention shifts to next week's interest rate review.
The Reserve Bank of New Zealand is set to meet next week, and is widely expected to keep the official cash rate at 7.25 per cent -- which is the
highest key interest rate in the developed world.
The high interest rate has driven yield interest in the kiwi dollar, which continued this week with the announcement of $ 1 billion in new kiwi denominated uridashi issuances. Uridashi are foreign currency denominated bonds sold to Japanese retail investors.
By 5pm today the kiwi was buying US66.54c from US66.47c at last night's local close, having traded between US66.51 and US66.86c today.
The kiwi gained against the aussie, as Australia reported its trade deficit for January had swollen to a record A$2.69 billion, more than double market expectations.
At 5pm today the kiwi was buying A89.39c, from A89.23 at the same time yesterday.
The Reserve Bank of Australia is also expected to hold its cash rate steady next week -- at 5.50 per cent.
The RBA last raised interest rates in March last year, by 25 basis points.
European Central Bank president Jean-Claude Trichet last night raised interest rates to 2.5 per cent, the highest level in three years, and left little doubt he will continue tightening in the months ahead.
Rates:
5pm today 5pm Thursday
NZ dlr US66.54c US66.47c
NZ dlr/Aust dlr A89.39c A89.23c
NZ dlr/euro 0.5537 0.5576
NZ dlr/yen 77.50 77.26
NZ dlr/stg 38.00p 38.00p
NZ TWI 68.25 68.27
Australian dollar US74.40 US74.53c
Euro/US dollar US1.2019 US1.1920
US dollar/yen 116.46 116.23
- NZPA
