The New Zealand and Australian dollars were sent on a roller-coaster ride yesterday, after interest rate action across the Tasman.
Reserve Bank Governor Don Brash hinted in a breakfast speech to a business audience that he may hold fire on lifting interest rates unless prices and wages rise in response. The kiwi, which was trading around 45.30USc, showed no reaction.
"Then the RBA [Reserve Bank of Australia] came out and moved rates up by 25 points," said Deutsche Bank foreign exchange vice-president Andrew Burdon.
"Initially we saw the aussie bounce 15 to 20 points on that. Then it came off, there was some very aggressive selling ... That dragged the kiwi down to its lows at 45.01USc. Then all of a sudden some big buyers came out."
Local banks bought the aussie "very aggressively," pushing it back to 58.50USc after seeing 57.60c. The kiwi had been up to a high of 45.60USc, Mr Burdon added.
The kiwi, which had opened at 45.35c, finished at 45.52c, near steady on Tuesday's 45.51c close.
On the cross rates the kiwi was down at 77.88Ac, from its close on Tuesday at 78.40c.
In the bond market prices were steady to one point weaker at the short end and unchanged to one point stronger at the long end.
In New York, US treasuries extended gains after data pointed to slower economic growth raising confidence that interest rate rises by the Fed may be nearly over.
- NZPA
Kiwi takes roller-coaster ride
AdvertisementAdvertise with NZME.