New Zealand dollar bounces after overnight wobble, Aussie drifts sideways
UUP•Australian dollar steady after hawkish RBA week
Across the Tasman Sea, the Aussie AUD=D3 was flat at $0.7061, having been mostly steady overnight. For the week, it is down just 0.1%, with support around $0.7022.
The Reserve Bank of Australia held interest rates steady at 4.35% this week for a second time, a decision that was largely as expected. Governor Michele Bullock, however, said she personally thought interest rates might have to go up again as the Strait of Hormuz remained closed and productivity growth stayed poor.
"Many of these risks sit outside the RBA’s direct control, making the inflation outlook particularly precarious in the near-term," said Stephen Smith, a partner at Deloitte Access Economics, who still tips a rate hike in November.
"The RBA is walking a narrow path."
New Zealand dollar edges higher after overnight weakness
SYDNEY, Aug 14 (Reuters) - The New Zealand dollar bounced on Friday after an overnight wobble as market pricing for an imminent rate hike remained firm, while the Aussie drifted sideways after a hawkish central bank week.
The kiwi NZD=D3 edged up 0.2% on Friday to $0.5865, having slipped 0.1% overnight to as far as $0.5822 as data showed a sharp drop in one-year inflation expectations. For the week, it is down 0.4%.
However, investors are still wagering heavily on a September rise in the 2.5% cash rate - about 85% priced - in part because the Reserve Bank of New Zealand has repeatedly flagged the need to make policy less stimulative.
Data showed New Zealand's manufacturing activity expanded again in July and the RBNZ maintained its loan-to-value ratio settings despite persistent weakness in the housing market.
