Dollar dips vs yen, kiwi lifted by RBNZ rate view

Greenback falls back after rising on Fed official’s hawkish statement

The dollar dipped against the yen on Tuesday, while the New Zealand dollar rose after the country’s central bank chief said he did not see the need for a rapid succession of interest rate cuts.

The dollar shed 0.1 percent to 100.22 against the safe- haven yen amid a pullback in Tokyo stocks.

The greenback had risen to almost 101.00 yen overnight following hawkish- sounding comments by Federal Reserve Vice Chair Stanley Fischer, before falling back.

The euro edged up 0.1 percent to $ 1.1332, stepping off an overnight low of $ 1.1271.

The New Zealand dollar was a relatively big mover in an otherwise subdued Asian trading session.

The kiwi was up 0.6 percent at $ 0.7308 after Reserve Bank of New Zealand ( RBNZ) Governor Graeme Wheeler said the current interest rate track involves further monetary easing but did not see the need for a rapid series of rate cuts.

“We remain committed to the inflation goals in the Policy Targets Agreement. We do not believe that the outlook and balance of risks warrants a position of no policy change, nor a position of rapid easings,” Wheeler said in a speech that was released on the RBNZ’s website on Tuesday.

The RBNZ in early August cut interest rates by 25 basis points to a record low of 2 per- cent and said further policy easing may be needed.

The kiwi nevertheless rose to a 15- month high of $ 0.7351 mid- month, as it has proved resilient to falling cash rates at home given they remain far higher than those of other developed economies.

While views expressed by various Fed officials over the past week have impacted the dollar, a wait- and- see mood has begun to take hold ahead of possibly the most decisive speech of them all – by Fed Chair Yellen on Friday.

The market’s focus was on whether she would express hawkish views similar to those of Vice Chair Fischer and New York Fed President William Dudley, or take a more subdued stance in line with the July Fed policy meeting minutes that suggested the central bank was not in any hurry to raise interest rates.