New Zealand’s dollar fell against its Australian counterpart from a five-year high after inflation expectations in the smaller nation topped out this quarter, damping the prospects for a rate increase.
The yield on Australia’s benchmark three-year government remained lower after minutes of the Reserve Bank’s Nov. 5 meeting showed policy makers kept the option of reducing rates if needed. Both South Pacific currencies fell against the yen as Asian stocks snapped a three-day advance.
Today’s data suggest that “maybe we are not in as inflationary an environment in New Zealand as what we thought,” said Jonathan Cavenagh, a currency strategist at Westpac Banking Corp. (WBC) in Singapore. Investors taking profit on short Aussie-kiwi positions has “probably been weighing on New Zealand dollar sentiment in the near term.”
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.