The New Zealand dollar rose to a record against the Russian ruble amid tensions with Ukraine and after the country's central bank this week scaled back its currency intervention policy.
The kiwi touched a record 36.07 ruble, and was trading at 35.91 ruble at 8am in Wellington, from 34.51 ruble at 5pm yesterday. The local currency edged up to 76.92 US cents, from 76.84 cents yesterday ahead of a key US non-farm payrolls report out today.
The ruble is on course for its biggest weekly loss in more than five years after the central bank on Wednesday said it would limit its currency intervention spending to US$350 million once a day, from a previous policy of US$350 million each time the ruble fell past the lower end of a trading band. Tensions with Ukraine, sanctions with the West, the withdrawal of western funds and prices for the country's main export, oil, at a four-year low, are also weighing on the ruble.
The combination of factors "allowed the ruble to depreciate sharply", said Sam Tuck, senior foreign exchange strategist at ANZ Bank New Zealand. "The expectations is that the ruble will continue to weaken further while the geopolitical concerns between the west and Russia continue and it would take a conciliatory mood between the two leaders for people to start investing in Russia from the west again."
ANZ's Tuck said the kiwi may trade between 75.80 US cents and 77.40 cents today, with the US employment figures likely to weigh on the currency on the prospect of a stronger US economy.
