NZ dollar rises after RBA holds rates
Tue, 03 Jul 2012 6:06p.m.
The New Zealand dollar rose against the greenback in local trading after the Reserve Bank of Australia left its official cash rate unchanged at 3.5 per cent, even as it dimmed its international outlook.
The New Zealand dollar increased to 80.40 US cents at 5pm from 80.16.
That is the highest the currency has traded since May 4. It rose as high as 80.61 cents in local trading.
The trade weighted index climbed to 72.53 from 72.30.
The kiwi was little changed on 78.34 Australian cents from 78.35 cents at 5pm.
The RBA's announcement was in line with market predictions that the rate would remain on hold after it cut a quarter-point in June and half percentage point in May.
"With inflation expected to be consistent with the target and growth close to trend, but with a more subdued international outlook than was the case a few months ago, the stance of monetary policy remains appropriate," Governor Glenn Stevens said in a statement.
"The RBA is really sticking to the script in terms of its recent outlook," said Dan Bell, currency strategist at HiFX.
"The New Zealand dollar has been trending high throughout the day - things aren't ramping away but they are holding onto recent gains which suggest we might see a little bit more upside in the kiwi."
The European Central Bank and the Bank of England will also meet to review its borrowing costs on Thursday.
The ECB is expected to cut its 1 per cent benchmark interest rate by 25 basis points.
Markets in the US will be closed tomorrow for Independence Day.
The kiwi rose to 63.81 euro cents at 5pm from 63.46 cents and advanced to 64.08 yen from 63.83 yen.
The kiwi fell to 51.19 British pence from 51.26 pence.
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