"Markets had a bit of a relief rally and have unwound that risk aversion trade they put on over the past week or so," said Martin Rudings, senior dealer foreign exchange at OMF in Wellington. While the US dollar was the biggest beneficiary, "both the kiwi and the Aussie have held up on the relief," he said.
Looking ahead, he said the overnight GlobalDairyTrade auction would likely garner some interest. Rudings said the futures are pointing to around a 5 per cent gain in whole milk powder but in recent auctions there has been a premium in the futures price with little participation in the auction so he is expecting a flat result.
The kiwi rose to 92.86 Australian cents from 92.53 cents yesterday. The Reserve Bank of Australia continued to warn that a rising Australian dollar would curtail hopes for stronger economic growth and higher inflation over time in the minutes from the August meeting.
The local currency was trading at 4.8717 Chinese yuan from 4.8682 yuan. It edged up to 61.99 euro cents from 61.81 cents and increased to 56.30 British pence from 56.15 pence. The kiwi at 77 on a trade-weighted index basis from 76.93 yesterday.
New Zealand's two-year swap rate rose 3 basis points to 2.17 per cent while 10-year swaps rose 4 basis points to 3.16 per cent.
