NZ dollar gains amid yen strength ahead of RBNZ rate review   11 Dec 2014

NZ dollar gains amid yen strength ahead of Reserve Bank rate decision

By Tina Morrison

Dec. 11 (BusinessDesk) - The New Zealand dollar gained as investors eschewed riskier assets in favour of the safe-haven yen while locally, traders await the Reserve Bank decision on interest rates this morning.

The kiwi advanced to 77.01 US cents at 8am in Wellington, from 76.83 cents at 5pm yesterday. The trade-weighted index edged lower to 77.40 from 77.45 yesterday.

Investors are cautious this week amid concern about political uncertainty in Greece and growth in China, reducing their holdings of riskier assets and favouring so-called safe havens such as the Japanese yen. Traders in the kiwi are awaiting Reserve Bank governor Graeme Wheeler's decision on interest rates this morning, where he is expected to maintain the benchmark at 3.5 percent and signal rates are on hold for the foreseeable future amid low inflation.

"The US dollar weakened further overnight as the Japanese yen strengthened," Kymberly Martin, senior market strategist at Bank of New Zealand, said in a note. "Risk appetite remained fairly muted. The ‘safe haven’ yen continued its rebound."

"It is now all eyes on the RBNZ and its Monetary Policy Statement which will show a full set of updated forecasts," she said.

The statement is scheduled for release at 9am in Wellington, followed by a media conference. Governor Wheeler is due to testify before parliament's finance and expenditure select committee at 1pm.

Meanwhile, monthly food price data will be released at 10:45am.

The New Zealand dollar touched a four-week low of 90.91 yen and was trading at 90.97 yen at 8am from 91.62 yen yesterday.

The local currency advanced to 92.75 Australian cents from 92.59 cents yesterday ahead of today's Australian employment data for November.

The kiwi fell to 61.88 euro cents from 62.05 cents yesterday and was little changed at 49 British pence from 49.02 pence.

(BusinessDesk)

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