Kiwi dollar falls ahead of RBNZ review

  • 07/09/2015
Kiwi dollar falls ahead of RBNZ review

The New Zealand dollar has fallen against the greenback and the Australian dollar as traders look ahead to the Reserve Bank's policy review amid expectations of an interest rate cut.

The kiwi fell to 62.64 US cents as at 5pm in Wellington, from 62.77 cents at the New York close on Friday. It fell to 90.48 Australian cents from 91.25 cents on Friday.

The trade-weighted index slipped to 68.52 from 69.27 on Friday.

Chinese stocks gained in Monday trading, after the market had been closed for four days.

There had been concerns that a stock market slump that had wiped almost US$5 trillion of the value of Chinese stocks since June would continue, signalling a slowdown in one of the biggest export markets for New Zealand.

At home, traders have put 78 percent odds of Reserve Bank governor Graeme Wheeler cutting the official cash rate a quarter point to 2.75 percent on Thursday and are looking for clues to further cuts.

"More and more people are saying they expect the situation in China to stabilise," said Mitchell McIntyre, senior dealer at NZForex.

"I think everyone is going to start to come round and see the kiwi at value here", although the prospect of US rate cuts is weighing on the currency.

An OCR cut on Thursday "is largely priced into the kiwi dollar - regardless of what the RBNZ does, I don't think we will see a great deal more downside for the kiwi from here," Mr McIntyre said.

The kiwi fell to 56.22 euro cents at 5pm in Wellington from 57.14 cents on Friday, to 74.79 yen from 75.86 yen and to 3.9899 yuan from 4.0424 yuan.

NZN