Dollar steady in Asia

The dollar held steady below a one-month high against a basket of currencies on Thursday, consolidating recent gains tied to bets the U.S. central bank could increase rates once more later this year.

The New Zealand dollar edged higher, after the Reserve Bank of New Zealand (RBNZ) kept its benchmark interest rate unchanged as widely expected and reiterated it would remain steady for a while yet.

The kiwi rose 0.4 percent from late U.S. trading on Wednesday to $0.7248, edging back in the direction of a four-month peak of $0.7320 set last week.

“The main takeaways from the statement were pretty much in line with the last statement. They’re still optimistic and positive on the medium-term growth outlook,” said Peter Dragicevich, G10 FX strategist for Nomura in Singapore.

“Could be some people in the market were looking for the RBNZ to be a little bit more forceful in their rhetoric around the exchange rate given how it’s rallied the last few weeks,” he said, adding the absence such jawboning probably helped give the kiwi a lift.

The U.S. dollar held steady against a basket of six major currencies at 97.551, having retreated from a one-month high of 97.871 set on Tuesday.

“I think the (dollar) bulls are taking a little bit of profit,” said Stephen Innes, senior trader for FX broker OANDA in Singapore.

While the Fed has sounded hawkish, recent U.S. economic data “hasn’t been stellar”, Innes added.

Last week, the Federal Reserve, as expected, raised key borrowing costs by a quarter point to 1.00-1.25 percent, while Fed Chair Janet Yellen downplayed recent signs of inflation softening.

Reuters

This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

Stephen Innes

Stephen Innes

Senior Currency Trader and Analyst at OANDA
Stephen has over 25 years of experience in the financial markets and specializes in Asian currencies at OANDA. After having started his trading career with NatWest Bank, he is currently based in Singapore as a Senior Currency Trader and Analyst with OANDA, focusing on the movement of the Aussie Dollar and ASEAN Currencies. Stephen has an extensive trading experience in Interest Rate Futures, Money Markets and Precious Metals. Prior to joining OANDA, he worked with organizations like Cambridge Mercantile, Nat West, Garvin Guy Butler, Sumitomo Mitsui Banking Corporation. Stephen was born in Glasgow, Scotland, and holds a Degree in Economics from the University of Western Ontario.
Stephen Innes
Stephen Innes

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