Currency: Market awaits rate decision

The New Zealand dollar had a mixed session, spent mostly below the US53c figure ahead of the Reserve Bank's official cash rate (OCR) decision tomorrow.

The NZ dollar was US52.96c at 5pm from US52.94c at 8am and US52.84c at 5pm.

Overnight the kiwi had tried to break higher but failed.

The bleak economic outlook was underlined by news that Fonterra has stripped 90c from its forecast payout for this season, slashing it from $6 per kg milk solids to $5.10.

But traders are waiting to see what Reserve Bank governor Alan Bollard will say tomorrow. The central bank said today the governor would hold a press conference when releasing the interest rate decision.

The market has priced in a cut on the OCR to 4 per cent from 5 per cent but there is speculation the central bank may move by more.

Against the Australian dollar the NZ dollar was A79.58c at 5pm from A79.79c at the same time yesterday.

Against the euro it was 0.3999 from 0.4015, and against the Japanese yen it was unchanged at 47.25 yen. Against the British pound it was 37.26p from 37.65p.

The trade weighted index stood at 52.80 from 52.78.

The US dollar edged up against the yen today and traders are awaiting new policy measures from the Federal Reserve to ease the credit crunch.

Currency rates:

NZ dlr/US dlr US52.96 US52.84

NZ dlr/Aust dlr A79.58 A79.79

NZ dlr/euro 0.3999 0.3996

NZ dlr/yen 47.25 47.25

NZ dlr/stg 37.26p 37.65p

NZ TWI 52.80 52.78

Aust dlr/US dlr US66.58 US66.23

Euro/US dlr 1.3238 1.3229

US dlr/yen 89.16 89.51

- NZPA