TODAY |

NZ dollar holds gains against Aussie


The New Zealand dollar held its gains against the Australian dollar today, which was sold on disappointment the Reserve Bank of Australia didn't take its cue from other central banks who have turned hawkish.

New Zealand currency fifty, dollar note (file picture). Source: istock.com

It preferred to reiterate its preference to keep policy in a neutral setting.

The kiwi rose to A95.62c as at 5pm in Wellington from 95.31c yesterday. The local currency traded at US72.83c from 72.70c with the July 4 Independence Day holiday in the US keeping markets across Asia relatively quiet.

The Australian dollar fell after RBA governor Philip Lowe said that his board "judged that holding the stance of monetary policy unchanged at this meeting would be consistent with sustainable growth in the economy and achieving the inflation target over time".

Some traders had expected he would take a lead from colleagues at central banks in Canada, England, Europe and even from Sweden's Riksbank in talking up the prospects of interest rate increases.

The change in tone leaves the RBA and New Zealand's central bank more defiantly neutral than many of the peers.

"The Aussie is still suffering from the RBA yesterday and the kiwi-Aussie cross has rallied quite hard," said Tim Kelleher, head of institutional foreign exchange sales at ASB Bank.

"The market has surmised that maybe the RBA would change its tune so the reaction has been to sell the currency."

The kiwi didn't move much after prices fell for a second time at the GlobalDairyTrade auction overnight or after the ANZ Commodity Price Index showed a 2.1 per cent gain in prices in June, led by milkfat and sheepmeat.

The kiwi gained to 4.9504 Chinese yuan from 4.9406 yuan, advanced to 64.14 euro cents from 63.93c and increased to 56.38 British pence from 56.15 pence. The kiwi gained to 82.45 yen from 82.24 yen.