The New Zealand and Australian dollars edged off highs on Friday on growing jitters over the upcoming Brexit vote, though both currencies were on track for hefty weekly increases. The New Zealand dollar nudged down to $0.7104, from $0.7135 early. It climbed to a one-year peak of $0.7148 on Thursday after the central bank held rates at a record low of 2.25 percent and appeared less dovish than the market was expecting.
It has jumped more than 2 percent so far this week against most currencies. "The NZD has been the star performer, following the RBNZ's Monetary Policy Statement," said BNZ FX Strategist Jason Wong. "The market's take was that NZ's high interest rate premium to the rest of the world would be maintained and that was a good reason to buy the NZD," said Wong.
The market trimmed the risk of an easing to 2.03 percent by November, from 2.01 percent before the policy review and is no longer fully priced for a cut. The euro plumbed its lowest since early January at NZ$1.5836. It was last at NZ$1.5908, having skidded 2.6 percent this week. The kiwi even outpaced a broadly healthy Australian dollar which slipped to a 13-month low of NZ$1.0407 on Thursday. It has steadied to NZ$1.0439, but was still on track for a weekly fall of 1.4 percent. Elsewhere, the Australian dollar marked time at $0.7412, having been repelled by a wall of resistance ahead of $0.7515 on Thursday. It was still up for a second consecutive week with a gain of 0.6 percent.
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