NZ dollar dips ahead of Fed chair Powell's testimony

By Rebecca Howard

July 9 (BusinessDesk) - The New Zealand dollar was weaker as investors continued to pare back expectations of a hefty US interest rate cut at the end of the month.

The kiwi fell to 66.20 US cents at 8am from 66.40 cents at 5pm. The trade-weighed-index was at 72.55 versus 72.71.

“Kiwi sticks to a tight range as the USD awakens from its slumber and strengthens once more,” said ANZ FX/strategist Sandeep Parekh

Markets pulled back expectations for a 50-basis point rate cut this month by the Federal Reserve after US strong jobs data last week but still anticipate a 25 basis point reduction.

The Federal Open Market Committee is due to meet July 30-31 but ahead of that Fed chair Jerome Powell will deliver a semiannual monetary policy report to the House Financial Services Committee on Wednesday in the US and then the Senate Banking Committee on Thursday.

Powell may use the opportunity to either stoke expectations for rate cuts or water them down.

The Federal Reserve is also due to publish minutes from its June meeting on Wednesday in the US.

“Markets continue to digest what the recent US jobs data mean for the Federal Reserve. It’s going to be all eyes on Fed chair Powell’s testimony to Congress later this week,” said Parekh.

The kiwi traded at 94.95 Australian cents from 95.02 Australian cents. Investors will be watching for Australian business and consumer confidence numbers today.

It traded at 52.91 British pence from 52.99 pence yesterday, at 59.06 euro cents from 59.12, at 72.03 yen from 71.92, and at 4.5544 Chinese yuan from 4.5748.

(BusinessDesk)

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