Australian, New Zealand dollars see gains

Story link: Australian, New Zealand dollars see gains

The euro weakened on Wednesday after the European Central Bank raised interest rates by a quarter of a percentage point to 4 percent. The hike in Eurozone rates had been expected, but the shared currency dropped 0.1 percent to £0.6775 in relation to sterling, while it was down 0.2 percent to $1.3500 versus the US dollar and fell 0.4 percent to ¥163.44.

Meanwhile, the Reserve Bank of Australia held interest rates at 6.25 percent, also as had been expected, although analysts believe that if the nation’s economy continues to grow as it did in the first quarter higher interest rates could be in the cards fairly soon. In midday trade in New York, the Aussie was up 0.4 percent to ¥102.02 versus the yen after going a bit higher earlier in the session, while it had added 0.7 percent to $0.8425 against the US dollar.

The New Zealand dollar was also higher on the session against the greenback, adding 0.2 percent to $0.7510 to the US currency after going to a new high of $0.7554 against the US dollar earlier in the session. It was the highest it had been against the greenback since March 1985 when it was first allowed to float freely. Later in the session, investors began to sell the kiwi, however, in favor of the yen as global equities markets began to decline and investors avoided risk.

The US dollar, meanwhile, weakened against the yen, dropping 0.3 percent to ¥121.05.