Curremcy: NZ dollar tiptoes higher through today’s session

The New Zealand dollar edged higher through today's session thanks to support from Uridashi and Eurokiwi bond issuance, a dealer said.

At 5pm, the kiwi was at US71.78c (from US71.26c at 5pm on Friday), having ranged between US71.61c and US81.81c. It began today's session at US71.60c.
BNZ currency strategist Sue Trinh said the kiwi today held on to its gains of late last week.

"On Friday, we saw nearly $500 million worth of New Zealand dollar bonds issued," Ms Trinh told NZPA today.

"That's all on the back of interest rate dynamics that are so supportive at the moment," she said.

"We've seen continued demand on the back of Uridashi and Eurokiwi issuance," she said.

Eurokiwis and Uridashis are New Zealand and Australian dollar denominated bonds sold to retail investors in Europe and Japan, where central bank rates are far lower than New Zealand's 6.75 per cent and Australia's 5.5 per cent.

Meanwhile, the aussie was buying US77.20c (US76.66c), while the kiwi was fetching A92.98c (A92.96c).

"After the Reserve Bank of Australia's decision to hold its benchmark interest rate it (the cross) has remained firm," Ms Trinh said.

"Expect that cross to remain reasonably solid and not fall onto the floor too soon," she said.

The euro was at US$1.2927c (US$1.2822), and the greenback was at 108.42 yen (108.67).

On its other major crosses this morning the kiwi was fetching 77.84 yen (77.43), 0.5553 euro (0.5558), 38.12 British pence (38.11) and 0.8604 Swiss francs (0.8626).

The trade-weighted index was at 70.53 (70.32), while the monetary conditions index was at plus 1067 (1052).

On the money markets, 90-day bank bill yields were unchanged at 7.10 per cent, July 2009 bonds were static at 6.23 per cent, and April 2015s were at 6.10 per cent (6.11).

A string of domestic data due out this week will be potentially market moving for the kiwi as it will give market watchers some clues on whether to expect a further interest rate hike later this month.

- NZPA