New Zealand’s dollar was set for the longest run of weekly declines against its Australian counterpart in more than a year as the smaller nation’s central bank signaled hesitation to raise borrowing costs.
The kiwi slid against all 16 major peers after Reserve Bank of New Zealand Governor Graeme Wheeler said he is concerned higher rates would drive up the currency and damage exports. Two-year interest-rate swaps in the nation fell for a seventh day, the longest stretch in almost two years. The Aussie declined versus the U.S. currency as Asian stocks fell, sapping demand for higher-yielding assets.
“I expect to see Aussie-kiwi rise a bit more,” said Kengo Suzuki, the chief currency strategist at Mizuho Securities Co. in Tokyo. “There’s a good chance that New Zealand will put off raising rates to avoid a stronger currency, and any indication of delay will cap a gain in the kiwi.”
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.