You are using an older browser version. Please use a supported version for the best MSN experience.

NZ dollar gains ahead of inflation data

NZ NewswireNZ Newswire 16/10/2016 Jonathan Underhill

The New Zealand dollar rose ahead of third-quarter inflation data on Tuesday which is expected to be weak enough to keep the Reserve Bank on track to cut interest rates next month.

The kiwi rose to 71.09 US cents as at 8am in Wellington from 70.84 cents in late New York trading on Friday. The trade-weighted index rose to 76.48 from 76.18.

The consumers price index didn't budge in the third quarter and rose just 0.1 per cent year-on-year, according to economists at the Bank of New Zealand. That's weaker than the Reserve Bank was projecting in its August monetary policy statement.

RBNZ assistant governor John McDermott said last week that the bank's current assumptions "indicate that further policy easing will be required to ensure that future inflation settles" within the bank's 1 per cent-to-3 per cent target range. Traders have increased bets the bank will cut the official cash rate to 1.75 per cent in November.

"A cut appears almost a done deal," said BNZ's Kymberly Martin.

Ahead of the inflation data, traders will be watching for the performance of services (PSI) report for September due out on Monday after its manufacturing counterpart, the PMI, rose to a seasonally adjusted 57.7 in September from 55.2 in August.

The kiwi dollar edged up to 93.15 Australian cents from 93.06 cents, gained to 58.51 British pence from 58.10 pence on Friday, it rose to 64.82 euro cents from 64.53 cents, climbed to 74.13 yen from 73.77 yen and strengthened to 4.7841 yuan from 4.7652 yuan.

image beaconimage beaconimage beacon