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Kiwi rises after RBNZ stands pat on interest rates

Kiwi rises after RBNZ stands pat on interest rates

The New Zealand dollar rose against its U.S. counterpart on Wednesday after the Reserve Bank of New Zealand’s decision to keep interest rates unchanged.

Most analysts expected a cut by 25 basis points to 0.75 percent cut in benchmark interest rates, as lower spending and global slowdown reduced New Zealand's economic growth to a six-year low.

But after two interest rate cuts this year, the RBNZ said it saw no urgent need to ease monetary policy further.

The RBNZ left the door open for further easing measures, saying it was "ready to act." The central bank said “we will continue to monitor the data and this will push our decisions from here and we will do what is required to do so.”

As of 08:38 GMT, the New Zealand dollar rose against the green currency by 1.17 percent to $0.6401. And if the ascent continues, it will be the biggest one-day increase since late January.

The New Zealand currency was one of the worst performing major currencies this year, where it hit its lowest level since July 2009 at $0.6203 on October 1.

Meanwhile, New Zealand's two-year bond yields jumped to their highest level in more than two years.

The U.S. dollar index, which tracks the greenback’s movements versus a basket of major currencies, set a high at 98.28, the highest level since mid-October, before snapping most of the gains to hover around 98.16.

Later in the day, eyes will focus on U.S. consumer prices, then Fed Chair Jerome Powell’s testimony before the Joint Economic Committee in Washington DC.

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