CANBERA (dpa-AFX) - The New Zealand dollar strengthened against other major currencies in the late Asian session on Thursday, following the hawkish comments from the Reserve Bank of New Zealand or the RBNZ Chief Economist Paul Conway.
The RBNZ Conway stated that the late-October rate decision is entirely up in the air and that the central bank continues to believe that an increase in the OCR is most likely, even though it hasn't determined when.
Market participants are still pricing in more than an 85% possibility that the US central bank would increase borrowing prices once more before the end of this year, according to the CME Group's FedWatch Tool.
Furthermore, prospects for additional Fed tightening are supported by inflation risks resulting from erratic energy prices.
Meanwhile, the US-Iran dispute over the Strait of Hormuz and growing tensions in the Middle East continue to drive the geopolitical risk premium, which might boost the safe-haven dollar and limit the NZD/USD pair.
The U.S. Producer Price Index (PPI), which is scheduled to be released later in the North American session, is now anticipated by traders as a source of motivation. In addition, Fed Chair Kevin Warsh's remarks at the IMF and World Bank annual meetings in Bangkok on Friday will be watched for additional clues regarding the direction of future policy.
In the late Asian trading today, he NZ dollar rose to a 2-week high of 0.5635 against the U.S. dollar and nearly a 2-week high of 1.2337 against the Australian dollar, from yesterday's closing quotes of 0.5608 and 1.2441, respectively. If the kiwi extends its uptrend, it is likely to find resistance around 0.57 against the greenback and 1.22 against the aussie.
Against the yen, the kiwi edged up to 88.85 from Wednesday's closing value of 88.60. The next possible upside target for the kiwi is seen around the 90.00 region.
Against the euro, the kiwi climbed to 1.9943 from an early 6-day low of 2.0006. On the upside, 1.98 is seen as the next resistance level for the kiwi.
Looking ahead, Canada manufacturing and wholesale sales for August, U.S. PPI for September, weekly jobless claims data, U.S. New York Empire State manufacturing index for October, U.S. Philadelphia Fed manufacturing index for October, U.S. retail and business inventories for August, U.S. retail sales data for September and U.S. EIA crude oil data are slated for release in the New York session.
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