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.