Kiwi holds gains after bank sits pat on rates

The New Zealand dollar was largely unchanged yesterday, holding the gains it made when the central bank held rates steady on Thursday and — contrary to expectations — was relatively sanguine about the kiwi’s strength.

The kiwi was trading at US72.67c as at 5pm yesterday from US72.63c at 8am and US72.52c late on Thursday. The trade- weighted index rose to 78.44 from 78.25.

Tim Kelleher, head of institutional foreign exchange sales at ASB Bank, said he was surprised there wasn’t more follow- through after the central bank’s statement. Governor Graeme Wheeler kept the benchmark rate unchanged at 1.75 per cent and said a lower New Zealand dollar would help rebalance the growth outlook towards the tradables sector.

“I would have thought the kiwi would have tested higher, but it may be running into sellers around these levels,” said Kelleher.

He said trading, however, was very quiet on the approach of month- and year- end for several banks. The northern hemisphere summer may also be sidelining investors, he said.

The kiwi traded at 57.20 British pence from 57.22p and rose to ¥ 80.90 from ¥ 80.55. It rose to 4.9719 yuan from 4.9530 yuan and gained to

€ 65.09c from € 64.91c. The kiwi rose to A96.19c from A96c late on Thursday.