Investing.com – New Zealand’s dollar was up against its U.S. counterpart for the third consecutive day on Monday, rising to hit a 2-week high, as markets took in stride news that China raised its benchmark interest rate over the weekend.
NZD/USD hit 0.7502 during early European trade, the pair’s highest since December 15; the pair subsequently consolidated at 0.7488, climbing 0.21%.
The pair was likely to find support at 0.7395, the low of December 23, and resistance at 0.7574, the high of December 14.
With markets in Wellington closed in observance of Boxing Day and many investors already away on year-end leave, trading volumes were low, resulting in volatile trade.
On Saturday, the People’s Bank of China raised its benchmark deposit and lending rates by 25 basis points for the second time since mid-October. China’s benchmark lending rate rose to 5.81%, compared with 7.47% before cuts from late 2008 to counter the global financial crisis, while the deposit rate increased to 2.75%.
The unexpected move was aimed at curbing inflation, which surged to a 28-month high of 5.1% in November.
Following the decision, Li Daokui, an adviser to China’s central bank said the Christmas weekend was "a very good time" for the PBOC to raise interest rates as this can help avoid over-reaction in U.S. and European financial markets, as the two regions are on holiday.
Meanwhile, the kiwi was down against the euro, with EUR/NZD rising 0.36% to hit 1.7559.
Investors expect trading to be quiet throughout the day, with markets in New Zealand closed for holiday and many traders in the U.S. on year-end leave.
NZD/USD hit 0.7502 during early European trade, the pair’s highest since December 15; the pair subsequently consolidated at 0.7488, climbing 0.21%.
The pair was likely to find support at 0.7395, the low of December 23, and resistance at 0.7574, the high of December 14.
With markets in Wellington closed in observance of Boxing Day and many investors already away on year-end leave, trading volumes were low, resulting in volatile trade.
On Saturday, the People’s Bank of China raised its benchmark deposit and lending rates by 25 basis points for the second time since mid-October. China’s benchmark lending rate rose to 5.81%, compared with 7.47% before cuts from late 2008 to counter the global financial crisis, while the deposit rate increased to 2.75%.
The unexpected move was aimed at curbing inflation, which surged to a 28-month high of 5.1% in November.
Following the decision, Li Daokui, an adviser to China’s central bank said the Christmas weekend was "a very good time" for the PBOC to raise interest rates as this can help avoid over-reaction in U.S. and European financial markets, as the two regions are on holiday.
Meanwhile, the kiwi was down against the euro, with EUR/NZD rising 0.36% to hit 1.7559.
Investors expect trading to be quiet throughout the day, with markets in New Zealand closed for holiday and many traders in the U.S. on year-end leave.