New Zealand Dollar Up Late on Profit Taking

 
   By Lucy Craymer 
 

        WELLINGTON, New Zealand--The New Zealand dollar is trading slightly higher late Friday as profit takers cash in after a sharp fall in the currency Thursday.
        Sam Tuck, senior foreign exchange manager at ANZ Bank, said the slight bounce higher did not mean the trend lower had reversed but indicative of profit taking in the market.
        He noted that in fact the ANZ jobs advertisement data released earlier in the day showed ongoing softness in the employment market and supported the premise that the New Zealand economy was weakening.
        The Kiwi was at US$0.6534 in late Wellington trading, compared with US$0.6510 late Thursday. The New Zealand dollar was at A$0.8819 versus A$0.8854 late Thursday.
        The next key event on the New Zealand calendar is the Reserve Bank of New Zealand official cash rate review on Thursday. According to the median poll of 16 economists by The Wall Street Journal, the RBNZ is expected to cut the cash rate by 25 bps to 3.0% when it meets next week with further cuts expected over the remainder of 2015. While a cut is unanimously expected Capital Economics is picking the central bank will cut the rate by 0.50 of a percentage point.
        Citi economist Paul Brennan said while he expected the central bank to cut by 0.25 of a percentage point next week there was a risk that Governor Wheeler will cut by 0.50 of a percentage point.
        "This would arguably force the currency lower given that such an outcome isn't priced by the market and be seen to help offset the faster-than-expected decline in dairy export prices," said Mr. Brennan, who noted by cutting by 0.5 of a percentage points the RBNZ would arguably shine a brighter light on the question of whether it had made a mistake by raising rates in 2014.
        Write to Lucy Craymer at lucy.craymer@wsj.com, @lucy_craymer
        (END) Dow Jones Newswires

        July 17, 2015 00:50 ET (04:50 GMT)

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