Monday 18th July 2016 |
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The New Zealand dollar was little changed from the New York close as investors wait for local inflation data this morning and an unexpected economic update from the Reserve Bank later this week.
The kiwi traded at 71.21 US cents at 8am from 71.09 cents at the New York close on Friday, down from 71.54 cents at 5pm in Wellington. The trade-weighted index was little changed at 76.11 from 76.13.
The second quarter consumers price index data today will be closely watched ahead of the Reserve Bank's economic assessment on Thursday, where governor Graeme Wheeler is expected to voice his discomfort with the strength of the kiwi dollar, which has been trading above the bank's projections. Wheeler has had to contend with rising house prices putting pressure on the nation's financial stability against the strength of the currency in limiting imported inflation.
"Although our pick for today’s CPI release (0.6 percent year on year) is marginally above consensus it is aligned with the RBNZ’s published forecasts," Bank of New Zealand senior market strategist Kymberly Martin said in a note. "It would take a much stronger print, in our view, to assuage the RBNZ’s fears about the impact that current NZ TWI strength will have on its goal of returning CPI to its 2 percent target over the medium-term."
The US dollar index, a measure of the greenback against a basket of currencies, rose after US retail sales and industrial production figures beat expectations, raising estimates for economic growth. Still, the US Federal Reserve isn't expected to resume hiking interest rates in the short-term as it weighs up the impact of the UK's vote to quit the European Union will have on the global financial system. The failed coup in Turkey also underpinned support for the greenback as investors sought the relative safety of the world's reserve currency.
The kiwi rose to 75.02 yen from 74.52 yen on Friday in New York and increased to 4.7621 Chinese yuan from 4.7534 yuan. It was little changed at 93.70 Australian cents from 93.80 cents last week and traded at 64.43 euro cents from 64.40 cents. The local currency was almost unchanged at 53.86 British pence from 53.88 pence last week.
BusinessDesk.co.nz
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