SINGAPORE- The New Zealand dollar rose on Tuesday after a strong business survey pulled forward rate hike expectations there to as soon November, while its Australian counterpart crept higher ahead of its own crucial central bank policy meeting later in the day.
The US dollar and other majors were mostly steady as investors wait on the minutes from the Federal Reserve’s meeting in June when it surprised markets with a hawkish shift. They are due to be published on Wednesday.
The euro held at $1.1860, more or less where it left off Friday and the yen rose a tad to 110.86 per dollar. Sterling nudged higher after Britain set plans to end COVID-19 restrictions in a fortnight, and last bought $1.3857.
The kiwi rose as much as 0.4 percent to a one-week high of $0.7066, briefly breaking above its 200-day moving average, before settling around $0.7055 in morning trade.
The Aussie tacked on 0.2 percent to $0.7541, though it was capped ahead of the Reserve Bank of Australia (RBA) meeting.
A business survey in New Zealand showed a sharp improvement in confidence, a willingness to raise prices and a record high level of firms facing hiring issues – prompting ASB Bank to pull forward rate hike expectations to just four months away.
“It is very clear that record amounts of monetary stimulus are no longer needed to support the economy and inflation risks are getting too high for comfort,” said ASB senior economist Jane Turner in a note. “We now expect the RBNZ to start lifting the OCR from November this year (previously May 2022).”
