Dollar little changed as Fed puts rate hikes on hold; Reserve Bank review looms
Kiwi traded at 76.91 US cents at 8am in Wellington, from 76.90 cents late yesterday.
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The New Zealand dollar was little changed ahead of the Reserve Bank's review of the official cash rate and after the US Federal Reserve said economic growth was slow in the world's largest economy.
The kiwi traded at 76.91 US cents at 8am in Wellington, from 76.90 cents late yesterday. The trade-weighted index decreased to 79.11 from 79.30.
The RBNZ's statement at 9am is expected to keep the OCR at 3.5 percent, although economists predict it may soften its rhetoric from the March monetary policy statement after assistant governor John McDermott said last week that a hike isn't being considered.
"The market seems well aware the RBNZ is likely to add some dovish tinges to its statement, it is less prepared for an uptick in NZD vitriol," Bank of New Zealand currency strategist Raiko Shareef said in a note. "Assistant Governor McDermott's speech last week noted NZD's strength was 'unwelcome', an upgrade in angst from March's missive. We'd be surprised not to see a similar sentiment expressed in today's statement."
Traders pushed out expectations for when US policy makers might lift rates after the Federal Reserve Open Market Committee noted economic growth had slowed in the first quarter, as winter weighed on US activity. US GDP expansion was below market expectations at 0.2 percent in the first quarter, but the Fed expects growth will return.
"The salient point was that, despite the slowdown in the economy and the labour market seen over Q1, the FOMC continues to expect this weakness to be transitory," Shareef said.
The New Zealand dollar dropped near-seven week low of 95.67 Australian cents, and traded at 95.89 cents at 8am, from 96.27 cents yesterday, as iron ore prices rose from their lows.
The local currency touched a month low 49.77 British pence from 50.17 pence overnight, and traded at 49.84 pence this morning. The kiwi dropped to 69.20 euro cents from 70.18 and was little changed at 91.54 yen from 91.47 yen.
(BusinessDesk)
Suze Metherell
Thu, 30 Apr 2015
Thu, 30 Apr 2015
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Dollar little changed as Fed puts rate hikes on hold; Reserve Bank review looms
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