Dollar Rises Slowly, Kiwi Slips, RBNZ Declines Possible Rate By Reuters

By Shinichi Saoshiro

TOKYO (Reuters) – The dollar rose slightly on Wednesday and the currencies of the antipodes retreated after the Reserve Bank of New Zealand surprised markets by opening the door to a future easing of monetary policy.

The basket against the six major currencies rose 0.2% to 96.912, adding to modest gains overnight.

The New Zealand dollar fell after the central bank kept interest rates at a record high of 1.75% and said the downside risks weighing on its outlook meant that the next rate move would be now more of a reduction.

The last drop of 1.5% to $ 0.6803 after reaching a low of $ 0.6797 in 2 and a half weeks.

The Australian dollar was down against its New Zealand counterpart, losing 0.4% to 0.7106 dollars.

"The industrialized countries are apparently in a hurry to adopt an accommodative political policy and the New Zealand central bank has just joined them, and in addition to the fall of the kiwifruit, this decline is also striking," said Ayako Sera, an economist in the United States. market leader Sumitomo Mitsui Trust.

Last week, the US Federal Reserve abruptly ended its policy of tightening monetary policy, abandoning expectations of rising interest rates this year due to signs of economic slowdown.

The European Central Bank, the Reserve Bank of Australia and the Bank of Japan also adopted an accommodative stance this year, as the Chinese central bank began to relax its policy in 2018.

The greenback was already stable after rising Tuesday, as yields on 10-year Treasury debt rebounded due to rising stocks on Wall Street.

"Dollar prices are coming back, Treasury yields are at their lowest, and also because negative views of the European economy do not favor their currencies," said Shin Kadota, chief strategist at Barclays (LON 🙂 in Tokyo.

A reversal of the US yield curve, which preceded every US recession of the last 50 years, cooled sentiment of risk and triggered a strong stock sale last week.

Safe-deposit bond yields also declined, putting pressure on the dollar.

The euro lost 0.1% to 1.125 dollar, prolonging day-to-day losses. The currency is in shaky ground after the weaker-than-expected German manufacturing industry survey on Friday raised concerns about Europe's biggest economy.

The pound fell 0.15% to $ 1.3185, tracing its previous gains against the generally stronger dollar.

Sterling got slight support after two eurosceptic British lawmakers announced Tuesday that they could agree to support the withdrawal agreement of Prime Minister Theresa May instead of risking the cancellation of Brexit by Parliament . [GBP/]

The dollar plunged 0.05% to 110,565 yen, losing strength after a 0.6% rise against its Japanese counterpart on Tuesday.

The figure was slightly higher at 2.417%. The yield fell Monday to 2.377%, its lowest level since December 2017.