Kiwi off lows after RBNZ holds rates, Aussie rebounds
The New Zealand dollar bounced from lows on Thursday, benefiting from a broadly softer greenback and after a widely expected decision by the Reserve Bank of NZ to hold rates unchanged and keep a tightening bias.
* Reserve Bank of New Zealand (RBNZ) kept rates at 3 percent and market sees little chance of a hike until March at the earliest given a disappointing domestic recovery and a mixed global outlook.
* With the RBNZ comfortable with the market's pricing on rate outlook, traders looked offshore for leads. A stronger Aussie and a bounce in the euro from lows combined to lift the kiwi.
* Kiwi edged higher to around $0.7474, from $0.7430 before the rate decision. Support around $0.7406, with resistance at $0.7500.
* Muted reaction in debt market following RBNZ rate decision, with NZ debt flat across the curve while bank bill futures softer.
* Market is priced for 68 basis points of tightening for the next 12 months, little changed from Wednesday.
* Australia dollar also off lows at $0.9748, having fallen as far as $0.9651 in the wake of the inflation data for a loss of 3.2 percent since Monday.
* Support for the Aussie seen around $0.9660 and its Oct. 5 low of $0.9541.
* Prospects for a rate hike in Australia next week dimmed on Wednesday when a tame inflation report removed the urgency for an increase at the Reserve Bank of Australia's policy meeting on Nov. 2.
* Australian bond futures were soft. The three-year contract was down 0.01 point at 95.07, and the 10-year contract was also off 0.01 point at 94.78.