Kiwi down after RBNZ comments

JAZIAL CROSSLEY
Last updated 08:40 26/10/2012

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Currencies

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The New Zealand dollar fell against the greenback today following comments from new Reserve Bank governor Graeme Wheeler that interest cuts could be on the horizon.

“New Zealand does not require quantitative easing: the economy is growing at an annual rate of around 2 per cent, and the Reserve Bank has scope to lower interest rates if needed," he said in a speech.

The kiwi recently traded at US81.78c, down from US82.24c in the morning. It eased to 73.20 on the Trade Weighted Index against major trading partners' currencies from 73.41 earlier.

ASB Institutional head of institutional FX sales Tim Kelleher said the kiwi weakened this morning on the back of Wheeler's comments.

"The kiwi is looking heavy into London open but I expect there will be buyers on the dips because the debt management office here issued new bonds, 2.5 billion sold and half of that went offshore. They settle next Wednesday so we expect demand there for kiwi," Kelleher said.

"Elsewhere today the aussie had a bad day as did the euro."

On the crosses the kiwi recently traded at 79.24 Australian cents, down from A79.30c in the morning. It was at 63.24 euro cents, down from 63.48 euro cents in the morning. It eased to 50.74 pence, from 50.98 pence earlier. It was at 65.45 Japanese yen, down from 65.99 yen earlier.

Kelleher expected the kiwi to trade between US81.20c and US82.10c overnight with a bias towards the downside.

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- © Fairfax NZ News

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