Kiwi steady ahead of OCR move

Written by admin on 30/07/2019 Categories: 佛山桑拿网

The New Zealand dollar was little changed ahead of the Reserve Bank decision on interest rates as traders await clues to the pace of the tightening cycle.

南宁桑拿

The kiwi was steady at US85.92 cents at 8am on Thursday from US85.94c at 5pm on Wednesday.

The trade-weighted index was almost unchanged at 79.96 from 79.99.

New Zealand’s central bank is later in the morning expected to hike rates for the second month in a row, taking the benchmark to 3 per cent.

Last month it became the first major central bank to raise interest rates since the global financial crisis, and signalled more hikes were in the pipeline as it attempts to head off inflation.

Still, traders are mulling whether the bank may slow the pace of future hikes after a decline in dairy prices and lower than expected inflation.

“Normally an interest rate hike by a central bank is very positive for the currency especially when they are the only ones tightening, but in the case of the RBNZ they could say future rate hikes will be conditional on data, which would suggest a pause in June,” Kathy Lien, managing director of foreign exchange strategy at BK Asset Management in New York, said in a note.

Traders will be focused on any comments on the outlook for future hikes as they mull so-called long bets on the currency, which anticipates a currency will rise in value, she said.

“If the RBNZ were to adopt a less hawkish posture, it would trigger further unwinding of long NZD/USD positions that could take the currency pair to 84 cents even if it remains one of the world’s most hawkish central banks.

“If the RBNZ tightens and remains committed to their hawkish monetary policy plans, NZD will soar as traders who sold above 87 cents reload their long positions.”

On Thursday morning, the kiwi slipped to 92.51 Australian cents from 92.59 cents, edged lower to 62.18 euro cents from 62.22 cents, advanced to 51.20 British pence from 51.07 pence and dropped to 88.03 yen from 88.15 yen.

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