NZ dollar touches 3-month high vs. British pound after weak UK inflation data
By Tina Morrison
Oct. 14 (BusinessDesk) - The New Zealand dollar touched its highest in more than three months against the British pound
after UK inflation unexpectedly turned negative last month.
The kiwi touched 44.08 British pence overnight, its highest level since June 25, and was trading at 43.78 pence at 8am
in Wellington, from 43.61 pence at 5pm yesterday. The local currency was little changed at 66.71 US cents from 66.62
The British pound weakened after a report showed consumer price inflation turned to an annual rate of -0.1 percent last
month, missing economist expectations and matching April's record low. That may prompt the Bank of England to hold off
raising interest rates from a record low, analysts said.
"UK CPI prices were weak, with a 0.1 percent annual decline," ANZ Bank New Zealand senior economist Mark Smith and
senior FX strategist Sam Tuck said in a note. "This saw GBP weaken overall."
ANZ expects the kiwi to trade between 43.40 British pence and 44.40 pence today, although it says the UK currency may be
bolstered by upbeat employment data due tonight.
In local trading today, the focus will be on a speech in Auckland by Reserve Bank governor Graeme Wheeler on reflections
on the world of central banking, which will be released at 9:10am.
ANZ expects the speech to cover a wide range of topics relating to monetary policy, the local outlook and how offshore
investors perceive the local economy.
Also scheduled for release today is the government's annual financial statements and non-resident government bond
holdings for September.
Traders will also be eyeing reports on Chinese inflation and Australian consumer confidence today, and US retail sales
and Eurozone industrial production tonight.
The New Zealand dollar advanced to 91.68 Australian cents from 91.20 cents yesterday, weakened to 58.58 euro cents from
58.65 cents, edged up to 79.93 yen from 79.86 yen, and increased to 4.2305 yuan from 4.2213 yuan. The trade-weighted
index advanced to 71.55 from 71.36 yesterday.