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Kiwi, Aussie move lower after RBNZ holds

2017-5-11 16:10:04Basics of Trading
Kiwi, Aussie move lower after RBNZ holds


The New Zealand and Australian dollars moved lower against their U.S. counterpart on Thursday, after the Reserve Bank of New Zealand left interest rates unchanged, while investors were still digesting recent U.S. political events.

NZD/USD declined 0.73% to an 11-month low of 0.6841.

Earlier Thursday, the RBNZ left its benchmark interest rate unchanged at 1.75%, in a widely expected move.

The central bank surprised markets by saying it expects to tighten monetary policy in late 2019. Economists had expected a shift in policy around the first half of 2019.

Commenting on the decision, RBNZ Governor Graeme Wheeler said that the recent decline in the New Zealand dollar was "encouraging, and if sustained, would help rebalance the growth outlook."

AUD/USD slipped 0.14% to trade at 0.7355.

Meanwhile, investors were still digesting U.S. President Donald Trump’s unexpected decision to fire FBI Director James Comey.

Comey had been leading his agency's investigation into alleged Russian meddling in the 2016 U.S. presidential campaign and possible collusion with Trump's campaign.

The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was steady 99.49, just off the previous session’s two-and-a-half week high of 99.61.