New Zealand Dollar Takes A Tumble Against Aussie After RBA

 
  


By Rebecca Howard 
 

        WELLINGTON, New Zealand--The New Zealand dollar stuck to a tight range against the greenback Tuesday, ahead of a dairy auction but took a hit against the Australian dollar after that country's central bank eased up pressure on the Aussie.
        The New Zealand dollar was at US$0.6565 in late Wellington trading, compared with US$0.6590 late Monday. It was at A$0.8932 versus A$0.9034 Monday.
        It fell sharply against the Australian dollar when Australia's central bank left interest rates unchanged on Tuesday, as expected, while leaving the door open for a cut later in the year should the economy falter. The Aussie got a solid lift when RBA Governor Glenn Stevens changed the bank's rhetoric around the currency somewhat, saying now the lower Aussie is adjusting to weaker commodity prices, when he had earlier been warning that further falls in the currency were both likely and necessary.
        It continued to tread water against the U.S. dollar ahead of the GlobalDairyTrade auction, which will take place overnight Tuesday. Dairy futures are pointing to another fall but analysts say news that Fonterra has pared back the amount on offer may help.
        While the Kiwi is likely to remain under pressure if the auction is weak, "markets are expecting further weakness from dairy, and the NZD has factored this into the price," said ANZ Bank.
        On the day, for example, the Kiwi barely flinched when the ANZ Commodity Price Index for July declined by 11.2%, marking the fourth consecutive fall in the index, which is now at its lowest level since October 2009.
        Write to Rebecca Howard at rebecca.howard@wsj.com; @FarroHoward
        (END) Dow Jones Newswires

        August 04, 2015 01:54 ET (05:54 GMT)

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