NZ dollar gains vs. yen, pound on BOJ speculation, UK rate cut

Monday 25th February 2013

The New Zealand dollar rose against the yen on reports the favoured candidate for Bank of Japan governor is the most aggressive in terms of reviving the world's No. 3 economy. The kiwi gained against the British pound after the UK's credit rating was cut.

The New Zealand dollar rose to 78.83 Japanese yen from 78.19 yen in late New York trading on Friday and gained to 55.29 British pence from 55.08 pence. It fell to 83.56 US cents from 83.73 cents.

Japanese newspapers and Reuters reported over the weekend that Prime Minister Shinzo Abe's favoured BOJ candidate is Asian Development Bank chief Haruhiko Kuroda, who reportedly shares Abe's desire for greater efforts to stimulate the economy, including weakening the currency. Moody's Investors Service cut the UK's credit rating to Aa1 from Aaa, weighing on the pound and stoking fears other AAA sovereigns may be at risk.

Kuroda is "more aggressive that the other guys, in line with Abe's plan to fire up the economy," said Imre Speizer, senior markets strategist at Westpac Banking Corp. "That's why dollar-yen has risen."

The UK rate cut weighed on the pound and also hurt risk sentiment because of the prospect that "some other Aaa ratings may be at risk," Speizer said.

The trade-weighted index slipped to 76.40 from 76.50.

The kiwi dollar fell to 63.15 euro cents from 63.51 cents. It fell to 81.06 Australian cents from 81.17 cents.

BusinessDesk.co.nz

Comments from our readers

No comments yet