RBA statement positive for kiwi dollar

The Reserve Bank of Australia's reading of the Chinese economy has helped lift the kiwi dollar above 82 US cents.

7 August 2012

The New Zealand dollar firmed against the greenback after the Reserve Bank of Australia kept its target cash rate unchanged at 3.5 per cent.

The kiwi advanced to 82.02 US cents at 5pm in Wellington from 81.96 cents at 8.30am and from 81.86 cents on Monday.

The trade-weighted index crept up to 73.54 from 73.49 on Monday.

Australia's central bank kept the benchmark interest rate unchanged, while signalling it was more comfortable about the nation's growth prospects, even as inflation remains low.

Stoking optimism among investors was Governor Glenn Stevens observation that "China's growth has moderated to a more sustainable pace, but does not appear to be slowing further," leaving Europe the "significant area of weakness".

"The RBA was a bit more bullish for the (NZ) currency from what the market expected," said Imre Speizer, market strategist at Westpac Banking in Auckland.

A softer landing in the Chinese economy "will be supportive for the currency and it's possible the kiwi can break 82.25 US cents (in the London trading session), which is a key resistance."

The kiwi rose to 77.51 Australian cents from 77.44 cents on Monday, and was little changed at 64.18 yen from 64.21 yen. It inched up to 66.169 euro cents from 66.05 cents.

NZN

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