NZ dollar range bound, looking for catalysts
It's been a quiet week for domestic data and that's likely to continue with the March quarter consumer price inflation data not due until April 20.
It's been a quiet week for domestic data and that's likely to continue with the March quarter consumer price inflation data not due until April 20.
A dearth of domestic data is keeping the New Zealand dollar in a tight range and while conditions may be building for it to break out, any catalysts are likely to come from offshore.
The kiwi dollar was trading at 70.26 US cents as at 5pm in Wellington versus 70.33 US cents as at 8am and 70.07 cents late yesterday. The trade-weighted index as at 76.17 versus 75.95 yesterday.
"Range trading is the main thing that is happening. We are getting lower highs and higher lows so maybe the conditions are building for a breakout of this range at some stage but for now the catalysts are just not there," said ANZ Bank New Zealand senior economist Philip Borkin. He noted it's been a quiet week for domestic data and that's likely to continue with the March quarter consumer price inflation data not due until April 20. "We are still waiting for a catalyst and I don't think it's going to be a domestic one. It's a case of watching the globe," he said.
The kiwi was trading at 56.44 British pence unchanged from yesterday, after getting a lift from UK Prime Minister Theresa May officially triggering Britain's exit from the European Union.
The local currency gained to 65.33 euro cents from 64.78 euro cents. The euro sagged after Reuters reported that European Central Bank policymakers were wary of changing their policy message after tweaks this month had raised expectations of the central bank ending its super-easy policy and eventually hiking interest rates.
The kiwi dollar was at 91.64 Australian cents versus 91.65 cents and rose to 78.14 yen from 77.94 yen yesterday. It increased to 4.8435 Chinese yuan from 4.8286 yuan yesterday.
The two-year swap rate fell 2 basis points to 2.30 percent while 10-year swaps fell 3 basis points to 3.39 percent.
(BusinessDesk)