The New Zealand dollar was largely unchanged in local trading after Reserve Bank of Australia deputy governor Guy Debelle indicated an open mind on the nation’s interest rate outlook.

The kiwi briefly dipped against its trans-Tasman counterpart after Debelle’s speech and traded at 94.56 Australian cents at 5 pm in Wellington from 94.58 cents at 8 am. It traded at 67.51 US cents from 67.43 cents.

Debelle told a business audience in Adelaide that conflicting economic trends will determine the outlook for interest rates.

“How those tensions are resolved will play a critical role in whether we continue to make satisfactory progress in achieving the goals of full employment and the inflation target,” Debelle said. He specified that “the two lenses on economic growth provided by the labour market and the GDP data are in stark contrast. A third lens, in the form of business surveys, sits in between the two.” 

“It appears to be that they are still in a wait-and-see mode,” said Tim Kelleher, head of institutional foreign exchange sales at ASB Bank. Markets had been poised for the RBA to shift to a more dovish stance, given slowing economic growth and the weakening housing market. 

The fact that the RBA remains on the fence “should put continued pressure on that kiwi-Aussie cross, which is just drifting off slowly,” said Kelleher.

Meanwhile, the kiwi has stuck to a tight 11 basis point-range against the greenback as traders wait on overseas events for direction, said  Stuart Ive, private client manager at OMF.

The European Central Bank interest rate announcement, US inflation data, further Brexit news and the release of the Federal Open Market Committee minutes tomorrow morning New Zealand time will dictate the kiwi’s movements, he said.

“The focus is clearly on central banks, having most turn dovish in the past month or so. Looking ahead, NZ CPI next week will be important if the dovish tone of the RBNZ is to be supported by data,” Ive said. 

New Zealand’s Reserve Bank surprised markets in its latest official cash rate review when it indicated that the next move was likely to be a cut. 

The trade-weighted index was at 73.17 from 73.09 this morning. The kiwi was at 51.66 British pence from 51.65, at 59.93 euro cents from 59.85, 74.99 Japanese yen from 74.91 yen and 4.5313 Chinese yuan from 4.5240.

The New Zealand two-year swap rate rose to 1.6659 percent from 1.6491 yesterday; the 10-year swap rate climbed to 2.2575 percent from 2.2525.

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