WELLINGTON: The New Zealand dollar dipped against its trans-Tasman counterpart after the Reserve Bank of Australia disappointed traders looking for hints of another rate cut, keeping the target cash rate unchanged and saying data will inform future movements.
The kiwi fell to 91.28 Australian cents at 5pm in Wellington from 91.61 cents immediately before the release. The local currency was little changed at 64.99 US cents from 65.04 cents at 8am, and up from 64.65 cents yesterday.
The RBA kept the benchmark rate at 2 percent, with governor Glenn Stevens saying “further information on economic and financial conditions to be received over the period ahead will inform the board’s ongoing assessment of the outlook and hence whether the current stance of policy will most effectively foster sustainable growth and inflation consistent with the target”.
He also noted the Australian dollar was “adjusting to significant declines” in commodity prices. Traders were preparing themselves for the bank to take a tougher line after Australia & New Zealand Banking Group economists changed their house view to predict two more rate cuts next year.
“There’s no hints of easing coming up in Australia which was what the markets had priced in,” said Imre Speizer, senior market strategist at Westpac Banking Corp in Auckland. “That’s why the Aussie’s gone up a bit” and why the kiwi dollar was weaker on the cross-rate, he said.
