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NZ dollar dips below 65 US cents

Published: Tue 6 Aug 2019 11:22 AM
NZ dollar dips below 65 US cents, recovers ahead of data, rate decisions
By Rebecca Howard
Aug. 6 (BusinessDesk) - The New Zealand dollar briefly dipped below 65 US cents overnight but recovered as markets shift their attention to domestic data and a rate decision in Australia.
The kiwi was trading at 65.36 US cents at 8am in Wellington from 65.21 cents at 5pm. It touched a seven-week low of 64.87 cents overnight. The trade-weighted index was at 72.67 points from 72.44.
The kiwi recovered after falling on escalating US-China trade tensions but "the rebound was modest and leaves the kiwi on thin ice ahead of tomorrow’s RBNZ meeting," ANZ Bank FX/rates strategist Sandeep Parekh said. "NZ employment data will drive the kiwi today.”
ANZ is expecting a second-quarter unemployment rate of 4.4 percent – versus 4.2 percent in the first quarter - as prior weakness in the economy filters through.
The Reserve Bank of New Zealand’s survey of inflation expectations at 3pm will also garner attention ahead of tomorrow’s rate decision here.
The central bank is expected to cut rates on Wednesday and leave the door open for more easing as heightened global uncertainty is coupled with a subdued domestic outlook. Of 17 economists polled by Bloomberg, 16 expect the central bank to cut rates by 25 basis points to 1.25 percent. Only one – Citi – sees the bank remaining on hold.
Ahead of that, however, investors will be watching for the Reserve Bank of Australia’s decision later today. While no cut is expected, the RBA’s forward guidance will be closely watched, said Parekh.
The market and analysts are expecting another RBA cut, but later in the year.
The kiwi was trading at 96.57 Australian cents from 96.14. It was at 4.6058 yuan from 4.5823, with the yuan still reeling after the market yesterday took it to its lowest against the US dollar in more than a decade.
The kiwi was at 53.80 British pence from 53.64, at 58.37 euro cents from 58.16, and at 69.39 yen from 69.13.
(BusinessDesk)
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