The local currency rose to US$0.7123 as at 8am in Wellington from 71 cents late yesterday. The trade-weighted index rose to 76.63 from 76.44.
NZX-traded dairy futures are pointing to an increase in prices at the GDT auction tonight, with Fonterra Co-operative Group putting up smaller volumes and squeezing supply. This morning, the market will be focussed on the consumers price index for the third quarter, which may show there was no inflation in the period, based on the headline measure, giving the Reserve Bank scope to cut interest rates next month.
“The NZD has edged higher overnight boosted by expectations that tonight’s GlobalDairyTrade auction will break its two consecutive decline streak and show an increase from the previous auction of between 5-10%,” traders at HiFX said in a note. The inflation data “will put further pressure on the Reserve Bank to cut interest rates in an effort to bring inflation back into its 1-3% target range,” they said, adding that the market is currently putting odds of a 25 basis point cut on November 10 at 84%.
The kiwi dollar rose to A$0.9350 from 0.9338 yesterday. The local dollar gained to £0.5848 from 0.5837. It rose to €0.6476 from 0.6465 and was little changed at 74 yen. It strengthened to 4.7994 yuan from 4.7802 yuan.
© BusinessDesk
