New Zealand currency recovers some value at week’s end

Story link: New Zealand currency recovers some value at week’s end

The Japanese yen was weaker on the day and on the week after a new decision by the Bank of Japan on Friday left interest rates there on hold for at least the time being. Most analysts expected that the rate would not change this month, but many expect that it will rise in August.

Remarks from the Bank’s governor that came with the release of the new rate decision, however, left that expectation in doubt. Those comments, that he would have to be satisfied that growth in the Japanese economy was sustainable before rates could rise further, along with separate comments from Japan’s finance minister, left no doubt that the government was not worried about the recent declines in the nation’s currency.

Over the week, the yen dropped 0.8 percent to ¥103.70 versus the Australian dollar, while it was down 1.3 percent to ¥164.90 against the euro. It fell 1.6 percent to ¥123.60 in relation to the US dollar and declined 1.9 percent to ¥244.20 versus sterling.

The other currency popularly sold to finance carry trades, the Swiss franc, was also lower on the week even though the Swiss National Bank raised interest rates to 2.5 percent. The Swiss currency dropped 0.6 percent to 1.6600 in relation to the euro, while it fell 0.7 percent to Sfr1.2440 against the greenback.

The New Zealand dollar had a rough week, dropping by more than 2 percent to $0.7465 versus the US dollar after the Reserve Bank of New Zealand took steps to intervene it its currency’s value on the theory that its 22-year high against the greenback and 17-year peak versus the yen made the kiwi overvalued.

Later in the week, however, the New Zealand currency began to recover and ended the week still down by 1.2 percent versus the US dollar at $0.7540 but 0.3 percent higher against the yen at ¥93.20.

The US currency ended the week mixed. It added 0.2 percent to $1.3350 in relation to the euro, but it dropped 0.2 percent to $1.9750 versus sterling.