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NZ dollar falls as November rate cut looms

NZ NewswireNZ Newswire 22/09/2016 Paul McBeth

<span style="font-size:13px;">The kiwi slipped to 73.03 US cents at 8am in Wellington from 73.29 cents a day earlier.&nbsp;</span> © Getty Images The kiwi slipped to 73.03 US cents at 8am in Wellington from 73.29 cents a day earlier.  The New Zealand dollar fell as the Reserve Bank lay the groundwork for lower interest rates later this year as inflation continues to be restrained by the strength of the currency.

The kiwi slipped to 73.03 US cents at 8am in Wellington from 73.29 cents a day earlier. The trade-weighted index declined to 77.50 from 77.78.

RBNZ governor Graeme Wheeler kept the official cash rate at 2 per cent at its review on Thursday, saying more easing was on the cards to get inflation back within the target band of 1-to-3 per cent.

His move followed the Federal Reserve, which also put off making a decision on whether to raise interest rates, a key influence on how deeply Mr Wheeler will have to cut. Meanwhile, The Reserve Bank of Australia's Philip Lowe told politicians he was comfortable with where rates were at in his first public outing as governor.

"The statement left us comfortable with our core view for an RBNZ rate cut in November, with a further cut in February being a line-ball call," BNZ's Kymberly Martin said.

She said the weaker TWI would be welcomed by the central bank after it reiterated at its review that 'a decline in the exchange rate is needed'.

The greenback was generally weaker with the US Dollar Index falling 0.3 per cent with the market taking its cue from the Federal Open Market Committee meeting.

The kiwi fell to 95.60 Australian cents from 95.93 cents, declined to 4.8653 Chinese yuan from 4.8880 yuan., dropped to 65.19 euro cents from 65.42 cents, slipped to 55.86 British pence from 56.17 pence, but increased to 73.64 yen from 73.46 yen as investors continue to digest the Bank of Japan's amended monetary policy.

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