Dollar low in lead-up to OCR

Currency markets were awaiting the Reserve Bank's announcement of the official cash rate (OCR), with analysts expecting a change to the key final paragraph.

Westpac currency strategist Imre Speizer said the market expected the Reserve Bank's to change the language of the last sentence of the Official Cash Rate report, to be released today at 9am.

"The AUD has broken below several key levels and now targets 0.8860. A `sell on rallies' approach is our preferred tactical strategy today. Similarly for the NZD, which may see minor support at 0.7250. The Reserve Bank of New Zealand (RBNZ) meeting at 9am if a major risk event," he said.

ANZ economist Philip Borkin expected the high NZD getting specific mention, likewise expecting change in the final paragraph of the RBNZ's OCR report.

"The uncertainly surrounding the [Reserve Bank's] decision this morning centres entirely on what words and phrases will be left in the statement, and what is taken out.

"In acknowledgement of improving economic prospects both locally and offshore, we expect the bank's explicit soft easing bias to be removed," he said.

The New Zealand dollar was trading at US72.84 at 8am today, from US73.82c at 5om yesterday. The kiwi traded for A81.13, from A81.20c yesterday, against the Australian currency, and for 0.4949 euro, from yesterday's 0.4982.

The New Zealand trade weighted index continued downwards to 65.74, from 66.49 at 5pm yesterday, and 67.22 at 5pm the day before.

- NZPA