BENHAR: The New Zealand dollar is heading for a two per cent weekly decline on a trade-weighted basis after the Reserve Bank surprised some investors with a rate cut.
THE trade-weighted index, a measure of the kiwi against a basket of currencies, fell to 73.16 at 5pm in Wellington from 74.66 on Friday in New York last week, and is little changed from 73.12 on Thursday.
The kiwi traded at 70.07 US cents from 70.17 cents on Thursday and is heading for a 0.2 per cent dip on the week from 70.23 cents at last Friday’s close.
The currency tumbled about two US cents after Reserve Bank governor Graeme Wheeler cut the official cash rate a quarter-point to 3.25 per cent, surprising some quarters in the market who were expecting the easing cycle to start later.
“After the move yesterday, people are happy to do nothing,” said Tim Kelleher, head of institutional FX sales NZ at ASB Institutional in Auckland.
“The TWI is quite a bit lower with big moves in the kiwi/Aussie, continued pressure on the kiwi/Sterling and even in the kiwi/euro.”
The is heading for a 1.9 per cent weekly fall against the Australian dollar and a 1.6 per cent drop against the euro.
It increased to 90.51 Australian cents at 5pm in Wellington from 90.31 cents on Thursday and to 62.36 euro cents from 62.08 cents.
