New Zealand dollar drops after Reserve Bank intervention

New Zealand dollar drops after Reserve Bank intervention

Story link: New Zealand dollar drops after Reserve Bank intervention

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The US dollar strengthened on Monday, while the Australian and New Zealand dollars saw declines after their big gains last week.

The Reserve Bank of New Zealand intervened in the rise of the dollar there by selling the currency after it said that it had risen too high. It was the first time the bank has intervened in the kiwi’s value since it allowed it to float freely in 1985. The big gains had come after the Bank raised interest rates to 8 percent last week. By midday in New York, the New Zealand dollar had dropped 1.9 percent to $0.7490 versus the US dollar and had fallen 1.7 percent to ¥91.20 in relation to the Japanese yen.

Several other currencies, including the Australian dollar, the euro, and sterling, dropped in against the yen as well. Sterling fell 0.1 percent to ¥239.44, while the euro was 0.2 percent lower to ¥162.44 and the Australian dollar dropped 0.3 percent to ¥102.50.

The US dollar was 0.1 percent higher versus the yen, to ¥121.76, while it also added 0.1 percent against the pound to $1.9670 and was 0.2 percent stronger in relation to the euro, to $1.3345.