NZ dollar inches above 65 US cents ahead of 3Q CPI data
By Rebecca Howard
Oct. 15 (BusinessDesk) - The New Zealand dollar inched back above 65 US cents, sticking to a very tight range ahead of
domestic inflation data tomorrow.
The kiwi traded at 65.01 US cents at 5pm from 64.98 US cents at 8am and from 65.06 cents last week. The trade-weighted
index was at 71.12 from 71.22 last week.
Economists expect the consumers price index rose 0.7 percent in the three months ended Sept. 30, for an annual increase
of 1.7 percent, according to the median in a poll of 14 economists surveyed by Bloomberg. While that number is higher
than the central bank is forecasting, the lift is largely due to fuel price increases and seasonal factors such as an
annual increase in local body rates, so is not expected to change the central bank's stance.
In September the central bank kept the official cash rate at 1.75 percent. It noted the impact higher fuel prices would
have on near-term inflation, but said it would "look through this volatility as appropriate." It still expects consumer
price inflation to "gradually rise" to the 2 percent annual target. Governor Adrian Orr indicated the next move could be
up or down.
Philip Borkin, senior macro strategist for ANZ Bank New Zealand, said the kiwi has "been remarkably quiet" in Asian
trading. He said currency markets in general are taking a back seat after last week's ructions in global bond and equity
markets.
Regarding the domestic inflation data, he said the market is "geared up" for a strong number so any disappointment would
see volatility on the downside.
The kiwi traded at 91.49 Australian cents from 91.33 cents on Friday in New York. It was at 49.60 British pence from
49.55 pence last week and was almost unchanged at 56.29 euro cents from 56.24 cents. It traded at 72.85 yen from 72.98
yen last week and slipped to 4.4961 Chinese yuan from 4.5010 yuan.
New Zealand's two-year rate was unchanged at 2.01 percent while 10-year swaps fell 4 basis points to 2.88 percent.
(BusinessDesk)