5.35pm
The New Zealand dollar slid lower today after the Reserve Bank announced its widely expected interest rate hike today would likely be the last in the current tightening cycle.
At 5pm today the kiwi was at US68.88c (from US69.45c at 5pm last night), having ranged between US68.67c and US69.30c.
Reserve Bank governor Alan Bollard raised the cash rate to 6.5 per cent from 6.25 per cent and surprised some forex players by saying the tightening phase was over.
A local dealer said offshore dealers had been looking for a neutral statement from Dr Bollard.
" They got that and they were prepared for it, whereas the local market appeared to be looking towards a hawkish statement. That sort of caught the local market and thus we saw a pretty quick correction in the kiwi."
However, he said the kiwi/aussie cross was the bigger mover today. The kiwi was buying A92.04c at 5pm from A93.28c at the same time yesterday.
The dealer said the kiwi's slide against the aussie was likely to continue more than its dip against the greenback, where it was likely to be supported by the US unit's own weakness.
Meanwhile, the aussie was at US74.84c (US74.45c at 5pm yesterday), the euro was at US$1.2722 (US$1.2735), and the greenback was buying 106.32 yen (107.05).
On the crosses the kiwi was buying 0.5414 euro (0.5454), 37.60 British pence (37.88), 73.22 yen (74.35), and 0.8302 Swiss francs (0.8357).
The trade-weighted index was at 68.18 (68.88), while the monetary conditions index was at plus 861 (914).
On the money market, 90-day bank bill yields were at 6.73 per cent (6.76).
February 2006 bond yields were unchanged at 6.19 per cent, July 2009s were at 6.06 per cent (6.03), and April 2013s were at 6.06 per cent (6.04).
- NZPA
<i>Currency:</i> Kiwi slides on central bank's Dovish rate stance
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