CANBERA (dpa-AFX) - The New Zealand dollar strengthened against other major currencies in the European session on Monday, as traders expect that the Reserve Bank of New Zealand (RBNZ) will deliver a rate hike later this week.
Traders anticipate that the RBNZ will hike the Official Cash Rate 25bps at this week's meeting to 3 percent.
Investors expect the Fed to keep interest rates unchanged in October, before pursuing another rate hike in December. Market pricing indicates a 79.7% chance of a rate increase in December, and a 90.6% chance of a rate pause at the October 27-28 policy meeting, according to the CME FedWatch Tool.
Traders await the key U.S. economic releases scheduled for this week to gauge future rate moves.
European stocks traded higher as easing oil prices provided some relief and investors looked forward to a slew of central bank meetings as well key tech earnings for directional cues.
The U.S. Federal Reserve, the European Central Bank and the Bank of Japan will announce their rate decisions in a dense three-day stretch from Oct. 28 to Oct. 30.
In the European trading today, the NZ dollar rose to 0.5685 against the U.S. dollar and 89.30 against the yen, from an early 4-day highs of 0.5706 and 89.63, respectively. If the kiwi extends its uptrend, it is likely to find resistance around 0.55 against the greenback and 88.00 against the yen.
Against the euro and the Australian dollar, the kiwi advanced to 1.9714 and 1.2363 from early lows of 1.9669 and 1.2323, respectively. The kiwi may test resistance around 1.99 against the euro and 1.25 against the aussie.
Looking ahead, U.S. Dallas Fed manufacturing index for October is due to be released in the New York session.
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