The New Zealand dollar continued to range trade today as the market consolidated following yesterday's official cash rate (OCR) announcement.
As expected, Reserve Bank governor Alan Bollard yesterday held the OCR at 6.5 per cent, but suggested the next move could be another rate hike, rather than a cut.
BNZ
currency strategist Sue Trinh said while a rate cut was still expected in this half of the year, the market had got ahead of itself prior to yesterday's announcement and now had to recalibrate expectations.
"Generally speaking it's quiet consolidation following yesterday's OCR review and also ahead of the US GDP number tonight," Ms Trinh said.
The New Zealand dollar continued to range trade against the greenback. At 5pm the kiwi was at US71.46c (from US71.59c at the same time yesterday) having ranged between US71.40c and US71.75c during the day.
Ms Trinh said the market was also waiting on the G7 meeting next weekend for some directional cues.
"The market is still trying to decipher all the comments that are coming out quite thick and fast from China about what potential changes could be expected from the exchange rate regime."
While the kiwi/greenback cross remained quiet today, the kiwi/aussie cross was a bit livelier, with the New Zealand dollar continuing to weaken. At 5pm today the kiwi had fallen to A92.17c, from A92.26c at 5pm yesterday.
Ms Trinh said the aussie was being supported by some signs that the Reserve Bank of Australia could raise rates later this year.
Meanwhile at 5pm today, the greenback was at A77.53c (A77.59c), 103.25 yen (103.21) and the euro was at US$1.3029 (US$1.3067).
On its other crosses the kiwi was buying 0.5483 euro (0.5479), 37.86 British pence (38.03), 73.77 yen (73.87), and 0.8471 Swiss francs (0.8470).
The New Zealand dollar trade-weighted index was at 69.42 (69.48), and the monetary conditions index was at plus 955 (959).
On the money markets, 90-day bank bill yields were unchanged at 6.78 per cent, November 2006 bond yields were static at 6.33 per cent, July 2009s were at 6.11 per cent (6.10), and April 2015s were at 6.04 per cent (6.03).
- NZPA
