WELLINGTON - The kiwi was range-bound today ahead of the Reserve Bank's interest rate review tomorrow morning.
The RB is expected to hold the official cash rate (OCR) steady at 7.25 per cent, but the market is waiting to see how strongly worded the accompanying statement is.
At 5pm today the kiwi was buying US68.23c, from US68.25c at 8.30am today. Overnight the kiwi staged an impressive rally, climbing from a low of US67.63c back over US68c.
Forex dealers said the kiwi's recovery showed that risk aversion was calming, after last week's sell-off on news officials had warned Japanese investors about the risks of investing in New Zealand dollar denominated bonds.
Against the Australian dollar at 5pm the kiwi was buying A90.84c from A90.44c at the same time yesterday.
The Australian dollar showed little reaction to fourth quarter inflation figures out today. The Australian consumer price index rose 0.5 per cent on the previous quarter and 2.8 per cent higher than the same time last year.
Meanwhile the US dollar rose against the euro today, after falling sharply earlier in the week on signals the Federal Reserve's tightening cycle was nearly over and talk from Fed officials that highlighted the dangers of the large US trade and budget deficits.
Rates:
5pm today 5pm Tuesday
NZ dlr/US dlr US68.23c US67.92c
NZ dlr/Aust dlr A90.84c A90.44c
NZ dlr/euro 0.5563 0.5530
NZ dlr/yen 78.57 78.01
NZ dlr/stg 38.29 38.06
NZ TWI 69.26 69.89
Australian dollar US75.12 US75.11
Euro/US dollar US1.2263 US1.2285
US dollar/yen 115.16 114.83
- NZPA
<EM>Currency:</EM> Kiwi treads water
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