Wednesday 5th June 2019 |
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The New Zealand dollar was higher on growing speculation the US could move to cut rates, in particular against the backdrop of rising trade tensions.
The kiwi was trading at 66.16 US cents at 7:50am in Wellington from 65.76 US cents at 5pm in Wellington. The trade-weighted index was at 72.52 points from 72.26.
The greenback came under pressure after US Federal Reserve Chairman Jerome Powell said the Fed is "closely monitoring" the implications of trade tensions and will "act as appropriate to sustain the expansion, with a strong labor market and inflation near our symmetric 2 percent objective."
The weaker US dollar meant the kiwi largely shrugged off news that global dairy prices dipped in the overnight auction, with the GDT price index down 3.4 percent from the previous auction two weeks ago.
"A weak result at last night’s GDT auction did little to cap the kiwi’s rise. The USD lost ground as the Fed’s Chair Powell hinted at a willingness to cut US interest rates amidst mixed data and trade tensions," said ANZ FX/rates strategist Sandeep Parekh.
The kiwi also pushed higher against the Aussie after Reserve Bank of Australian governor Philip Lowe signaled another rate cut may be on the cards after it cut rates to a record low 1.25 percent yesterday. He told a business dinner in Sydney that while the board had not yet made a decision, "it is not unreasonable to expect a lower cash rate."
The kiwi was trading at 94.56 Australian cents versus 94.40 late yesterday in Wellington.
The New Zealand dollar was at 52.04 British pence from 51.93, at 58.72 euro cents from 58.50, at 71.48 yen from 71.01 and at 4.5684 Chinese yuan from 4.5437.
(BusinessDesk)
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