The New Zealand dollar rose against the pound after the Bank of England trimmed its inflation forecasts and gave a less upbeat account of the British economy than traders were expecting. The kiwi extended its slide versus the Aussie dollar after Australia posted a record December trade surplus.
The kiwi dollar rose as high as 58.42 British pence after the BOE statement and was at 58.13 pence as at 8am in Wellington, up from 57.59 pence late yesterday. The local dollar fell as low as 94.48 Australian cents, the lowest in more than a week, and was recently at 95.11 cents from 95.52 cents yesterday. It traded at 72.85 US cents from 72.98 cents.
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Traders dialed back expectations of a hike in British interest rates this year after the BOE reiterated that interest rates could move in either direction. While the central bank raised its growth forecasts as expected, with 2017 gross domestic product now forecast to grow 2 percent. The kiwi fell further against the Australian dollar following figures yesterday showing Australia recorded a seasonally-adjusted trade surplus of A$3.5 billion in December, a sign that the economy is benefitting from resurgent commodity prices.
