Dollar holds near 65c as China rate cut keeps investors edgy
Kiwi rose to 64.93 US cents at 5pm in Wellington from 64.78 cents yesterday.
The New Zealand dollar held near the goldilocks level of 65 US cents as investors remained on edge as China's central bank cut interest rates in a bid to shore up sentiment after the stock market rout through the start of the week.
The kiwi rose to 64.93 US cents at 5pm in Wellington from 64.78 cents yesterday, and was almost unchanged from 64.97 cents yesterday. The trade-weighted index was little changed at 70.12 from 70.01 yesterday.
Stocks across Asia were mixed as investors weigh up the impact of a rate cut by People's Bank of China, and whether it will steady Chinese equities which have dropped about 15 percent this year. Commodity currencies, such as the kiwi and Australian dollars, have been sold off as investors spurn risk-sensitive assets on the equity market selloff. While trading settled down today, the Chicago Board Options Exchange's Volatility Index, known as Wall Street's fear gauge, was at 36.02, a level 95 percent higher than its moving average over the past year.
"The Volatility Index is at 36, and the market's bracing itself for that type of level of volatility - it could happen at any time," said Martin Rudings, senior dealer foreign exchange at OMF in Wellington. "We're bracing ourselves because there's still a chance that the action from China is not enough."
Government figures today showed New Zealand's July trade deficit was smaller than expected at $655 million as rising beef and fruit exports offset flat dairy sales, which have been hit by weaker global milk prices.
New Zealand's two-year swap rate slipped one basis point to 2.81 percent, and the 10-year swap was unchanged at 3.52 percent.
The local currency rose to 91.04 Australian cents from 90.22 cents yesterday, and edged down to 4.1620 Chinese yuan from 4.168 yuan. It increased to 56.49 euro cents from 56.24 cents yesterday, and increased to 41.36 British pence from 41.18 pence. The kiwi was little changed at 77.62 yen from 77.68 yen yesterday.
(BusinessDesk)
Paul McBeth
Wed, 26 Aug 2015
Wed, 26 Aug 2015
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Dollar holds near 65c as China rate cut keeps investors edgy
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