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Forex News: NZ Dollar Higher As RBNZ's Hawkesby Says Rate

NZ Dollar Higher As RBNZ's Hawkesby Says Rate To Be On Hold In Near-future

06/05/2019 - 03:33:00 (RTTNews)

(RTTNews) - The New Zealand dollar spiked up against its major counterparts in the Asian session on Wednesday, after the release of a speech by Reserve Bank of New Zealand Assistant Governor Christian Hawkesby suggesting that interest rates are likely to remain around current levels for the foreseeable future.

"Our central view is that New Zealand's interest rates will remain broadly around current levels for the foreseeable future. However, we need to be ready to adapt to changing conditions, to meet our objectives even when confronted with unforeseen developments," Hawkesby said at a speech to the Bank of Japan's Institute for Monetary and Economic Studies on May 30, which was released today.

Further underpinning the currency was rising risk appetite, as Asian shares rose following the overnight rally on Wall Street after comments by Federal Reserve Chairman Jerome Powell generated optimism about a potential interest rate cut.

Powell said the central bank will act "as appropriate" to sustain the economic expansion. Worries about trade tensions also eased after China's Ministry of Commerce said that the U.S.-China trade dispute can only be resolved through talks.

The kiwi strengthened to 0.6650 against the greenback, its highest since May 3. The kiwi is seen finding resistance around the 0.68 region.

The kiwi that ended Tuesday's trading at 71.45 against the yen spiked up to an 8-day high of 71.82. If the kiwi rises further, 73.00 is possibly seen as its next resistance level.

The latest survey from Nikkei showed that Japan services sector continued to expand in May, albeit at a slower pace, with a services PMI score of 51.7.

That's down marginally from 51.8 in April, although it remains above the boom-or-bust line of 50 that separates expansion from contraction.

The NZ currency appreciated to a 4-week high of 1.6950 against the euro, compared to 1.7029 hit late New York Tuesday. The kiwi is likely to test resistance around the 1.66 mark.

The kiwi rose back to 1.0534 against the aussie, not far from near a 3-week high of 1.0527 touched at 9:30 pm ET. The next possible resistance for the kiwi is seen around the 1.04 level.

Data from the Australian Bureau of Statistics showed that Australia's gross domestic product gained a seasonally adjusted 0.4 percent on quarter in the first three months of 2019.

That was in line with expectations and up from the 0.2 percent increase in the three months prior.

Looking ahead, PMI reports from major European economies, Eurozone retail sales and producer prices for April are due in the European session.

At 8:15 am ET, ADP private sector payrolls for May are scheduled for release.

The U.S. ISM non-manufacturing composite index for May and Federal Reserve's Beige book report will be out in the New York session.

For comments and feedback: contact editorial@rttnews.com

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