New Zealand Dollar Inching Higher on Positioning Ahead of RBNZ

 
   By Rebecca Howard 
 

        WELLINGTON, New Zealand--The New Zealand dollar continued to track higher Tuesday as investors booked profits and locked in positions ahead of the central bank meeting Thursday.
        The Kiwi was at US$0.6593 in late Wellington trading, compared with US$0.6570 late Monday. The New Zealand dollar was at A$0.8972 versus A$0.8925 previously.
        According to the median from a poll of 16 economists by The Wall Street Journal, the RBNZ is expected to cut the cash rate by 25 basis points to 3.0% Thursday. There is some speculation, however, that the central bank might even cut by 50 basis points.
        Stuart Ive, private client adviser at New Zealand trading firm OM Financial, said the Kiwi continued to benefit from comments by Prime Minister John Key, who said the recent fall in the New Zealand dollar was faster than expected and was helping support the economy, as were lower interest rates.
        "It's a follow through from yesterday and this market has been heavily short for a very long time," said Mr. Ive. He said some investors are locking in profits and some are taking out insurance policies against their short positions ahead of Thursday's RBNZ meeting. The market has fully priced a rate cut and is expecting a very dovish statement and "failure to deliver those could see a bit of a rally purely as these shorts are squeezed out," he said.
        Write to Rebecca Howard at rebecca.howard@wsj.com; @FarroHoward
        (END) Dow Jones Newswires

        July 21, 2015 01:59 ET (05:59 GMT)

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