Forex – Kiwi Eases After RBNZ Holds Steady, China Trade Data Ahead

© Reuters. Kiwi down in Asia – The kiwi fell in Asia on Thursday after the central bank expressed concern over market volatility, but expected steady policy ahead.

fell 0.18% to 0.7226 after the Reserve Bank of New Zealand held the official cash rate at a record low 1.75% as expected on Thursday with Governor Grant Spencer warning that volatility in financial markets could signal higher rates with unemployment near the natural level.

But the overall tone of the statement was for stable policy.

“Monetary policy will remain accommodative for a considerable period,” the bank said after its latest policy meeting. “Numerous uncertainties remain and policy may need to adjust accordingly.”

Ahead, China reports data with a $54.10 billion surplus seen for January and up 9.6%, a dip from 10.9% in December, and expected up 9.8%, a jump from 4.5% in December.

traded down 0.13% to 0.7813 ahead of the China data with the currency’s fortunes closely tied to its top trading partner. changed hands at 109.36, down 0.01%.

The , which measures the greenback’s strength against a basket of six major currencies, was last quoted up 0.71% to 90.16.

Market participants were looking ahead to the RBNZ’s monthly policy decision, due early Thursday. The central bank was expected to leave interest rates on hold at 1.75%.

Investors will especially be focusing on the RBNZ’s policy statement for potential indications on the central bank’s future policy moves.

Overnight, the U.S. dollar was higher against other major currencies on Wednesday, as it recovered from earlier losses.

The dollar had risen after global equity markets fell on Friday following the release of strong U.S. employment data, which sparked concerns over rising inflation, sending bond yields sharply higher.

The index was particularly hit on Monday, when it recorded its worst daily point drop in history. Equities rebounded on Tuesday, which pressured the greenback after it had benefited from the sharp sell-off.

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