The kiwi rose to US0.7071 as at 8am in Wellington, from 0.7038 late yesterday. It gained to 74.36 yen from 74.16 yen following Japan’s announcement of a stimulus package of more than 28 trillion yen (US$265 billion), bigger than expected and lifting expectations for easing by the bank of Japan on Friday.
The Fed left its target interest rate in a range of 0.25-0.5% as expected and said near-term risks to the US economic outlook had diminished and the labour market had improved, suggesting it will raise rates later this year. The Fed statement kept alive bets that the central bank could raise rates as soon as September, although a Reuters survey suggests it will wait until December.
“Overall, we’d say the Fed is buying time, and not trying to point the market toward an imminent hike, but our view of a hike by year-end seems on track,” Bank of New Zealand senior market strategist Kymberly Martin said. After Japan’s Prime Minister Shinzo Abe unveiled his stimulus package “the market is now speculating whether this will be complemented by an announcement of further monetary stimulus from the Bank of Japan tomorrow.”
The kiwi rose to 74.41 yen from 74.16 yen late yesterday.
It gained to A0.9439 from 0.9398 after figures yesterday showed Australia’s consumer prices remained weak in the second quarter, keeping alive expectations the Reserve Bank of Australia will cut the cash rate a quarter point to 1.5% next week. Australia’s trimmed mean CPI rose 1.7% from a year ago compared to economist expectations of 1.5%.
The kiwi fell to 4.7143 yuan from 4.6947 yuan and slipped to £0.5349 from 0.5360. It was little changed at €0.6391 from 0.6399.
