The New Zealand dollar is trading higher late Thursday after rallying strongly on comments from the Reserve Bank of New Zealand early in the session.
Gains came after RBNZ Governor Graeme Wheeler described the New Zealand dollar as high, but said this gives the central bank “greater flexibility as to the timing and magnitude of future increases in the OCR (official cash rate),” ASB’s head of institutional FX sales, Tim Kelleher, said. “Because he didn’t call the currency overvalued it’s basically carte blanche to tweak it higher again,” Mr. Kelleher said.
Westpac currency strategist Imre Speizer noted the market seemed to be positioned ahead of the release for “more emphatic concern regarding the exchange rate,” and when that failed to emerge, the New Zealand dollar rose 45 points against the U.S. dollar.
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