Kiwi strengthens as RBNZ hikes interest rates

Published: 24 Apr at 9 AM Tags: Euro, Dollar,

The New Zealand dollar has climbed to its highest level in a week after the country’s central bank pushed up interest rates and hinted that there could be more hikes to come. The Reserve Bank of New Zealand increased its cash rate from 2.75 per cent to 3.0 per cent leaving the kiwi to trade at $0.8638.

The New Zealand dollar is also up against the Aussie dollar, the euro and the yen. Disappointing inflation data released earlier in the weak has put pressure on the Aussie. The Antipodean currencies have been the biggest movers so far this week.

The yen has been given a slight boost after Shinzo Abe, the Japanese premier, confirmed that trade talks would continue with the United States. A trade agreement would represent the third part of Abe’s structural reforms along with monetary and fiscal stimulus measures already in place.

Investors will now be concentrating on Friday’s inflation data from Japan. The dollar is currently buying 102.30 yen, a drop of 0.2 per cent. The dollar could come under further pressure from its Japanese rival if strong inflation data makes further monetary easing by the Bank of Japan unlikely in the near future.

The euro is little changed at $1.3822.