New Zealand Dollar Up Late After RBNZ Retains Tightening Bias

 
   By Lucy Craymer 
 

        WELLINGTON, New Zealand--The New Zealand dollar is higher late Thursday after rising sharply as the market was surprised by the hawkish tone of the central bank's monetary policy statement.
        In late Wellington trading, the New Zealand dollar was at US$0.7805 from US$0.7692 late Wednesday. It was at A$0.9369, compared with A$0.9270 Wednesday.
        The Reserve Bank of New Zealand kept interest rates on hold Thursday at 3.5% and retained its tightening bias. However, it signaled more gradual increases as inflation remains weak and international dairy prices tumble. "Inflation is currently low, but is expected to rise slowly over the medium term, with continued strong demand growth and increasing pressures on capacity. We expect a gradual increase in interest rates," Reserve Bank Gov. Graeme Wheeler said.
        ASB Head of FX Institutional Sales Tim Kelleher said the New Zealand dollar rallied against both the Australian dollar and the U.S. dollar after New Zealand's central bank released its monetary policy statement release earlier in the session.
        "The New Zealand dollar is a beacon to yield seekers," which was seeing plenty of offshore interest in the currency, said Mr. Kelleher.
        Write to Lucy Craymer at lucy.craymer@wsj.com, @lucy_craymer
        (END) Dow Jones Newswires

        December 10, 2014 23:41 ET (04:41 GMT)

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