New Zealand Dollar Inches Higher Ahead of RBNZ Meeting

   By Rebecca Howard

        WELLINGTON, New Zealand--The New Zealand dollar continued to inch higher against the U.S. dollar ahead of the central bank meeting on Thursday.

        The New Zealand dollar was at US$0.6620 in late Wellington trading, compared with US$0.6593 late Tuesday. The New Zealand dollar was at A$0.8920 versus A$0.8972 previously.

        According to the median from a poll of 16 economists by The Wall Street Journal, the Reserve Bank of New Zealand is expected to cut the cash rate by 0.25 percentage point to 3.0% Thursday. While there is some speculation the central bank could cut by as much as 0.5 percentage point, it is more likely to cut by 0.25 percentage point, ANZ Senior FX Strategist Sam Tuck said.

        "I do think the RBNZ's pretty well understood by the market in terms of what they are going to do," Mr. Tuck said.

        ANZ is expecting a 0.25 percentage point rate cute and a clear further easing bias, as well as continued modification of the language around the New Zealand dollar. "That's not to say they won't expect further declines will be justified," he said.

        As a result, he doesn't expect too many fireworks from Thursday's meeting. "I expect the RBNZ's decision should be a relative non-event for the New Zealand dollar although obviously we could get a surprise," Mr. Tuck said.

        Westpac Bank said Wednesday there is around a 30% chance of a 0.5 percentage point cut and it would cause the New Zealand dollar to fall around 2 cents against the U.S. dollar.

        Write to Rebecca Howard at rebecca.howard@wsj.com; @FarroHoward

        (END) Dow Jones Newswires

        July 22, 2015 01:23 ET (05:23 GMT)

#FX

#Forex

#SaleForex

#NewZealandDollar

#InchesHigher

#RBNZ_Meeting

#ANZ_Senior

#FX_Strategist

#PercentagePoint