NZ dollar little changed as RBA minutes confirm rate views, Cyprus worries linger

The New Zealand dollar was little changed after the Reserve Bank of Australia released minutes of its last policy meeting, giving little further in the way of clues to its interest rate intentions.

The kiwi dollar traded at 82.48 US cents, little changed from the start of New Zealand trading and up from 82.33 cents the previous day. The trade-weighted index rose to 75.89 from 75.75.

The Reserve Bank of Australia said the economy across the Tasman is showing signs of responding to low interest rates though it stands ready to cut rates further. At the time of its March 5 meeting, information to hand showed it was appropriate to keeps the cash rate at 3 percent.

“There was nothing that was really too fresh” in the minutes, said Chris Tennent-Brown, FX economist at Commonwealth Bank of Australia. The RBA “is a little bit more comfortable with the situation than it was a month or two ago.”

Traders are looking ahead to the Federal Reserve’s policy statement on Thursday and there is a risk that a reasonably dovish statement could see the US dollar weaken.

The situation in Cyprus, where banks are shut to prevent a run on lenders and politicians are pondering ways to water down terms of a 10 billion euro bailout, “is a reminder how delicate things are” in Europe, Tennent-Brown said.

The kiwi traded at 63.65 euro cents from 63.69 cents at the start of the day and from 63.76 cents the previous day. The local dollar bought 54.60 British pence from 54.51 pence yesterday.

The New Zealand dollar slipped to 79.41 Australian cents from 79.49 cents the previous day and rose to 78.87 yen from 77.96 yen.