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Kiwi falls against pound and greenback

NZ Newswire logoNZ Newswire 15/06/2017 Jonathan Underhill
New Zealand coin is arranged for a photograph in Wellington, New Zealand © Mark Coote New Zealand coin is arranged for a photograph in Wellington, New Zealand

The New Zealand dollar has declined against the pound after the Bank of England policy committee kept rates on hold but with a split vote, while it fell against the US dollar in the wake of a Federal Reserve statement that kept intact plans for another rate hike this year.

The kiwi fell to 56.46 British pence as at 8am on Friday in Wellington from 56.64p late Thursday. It traded at US72.02 cents, having touched US71.83c overnight, from US72.22c Thursday.

The pound rose after the BOE kept its key rate unchanged at 0.25 per cent as expected but it emerged that as many as three policy committee members had voted to raise interest rates.

In the US, investors are mulling the Fed's Thursday statement, which projected further rate hikes and plans to start unwinding the central bank's enormous balance sheet, while appearing to downplay weaker-than-expected inflation data.

The kiwi is also under pressure following first-quarter economic growth figures yesterday that showed the economy is growing slower than expected.

"This week's run of softer data will doubtless dent the NZD's shiny armour, but while disappointing, the data were only relatively minor misses, and in level terms, New Zealand's economic credentials remain sound," said ANZ senior rates strategist David Croy.

"The Fed is optimistic that it will continue raising rates, and that is likely to lend the USD support should they be correct in that assessment."

On Friday morning, the kiwi edged up to 95.07 Australian cents from A94.88c on Thursday. It fell to 4.9058 yuan from 4.9063 yuan, rose to 79.94 yen from 79.16 yen and rose to 64.62 euro cents from 64.36c.

The trade-weighted index rose to 77.58 from 77.48.

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