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TEHRAN, Feb 13 - The New Zealand dollar and Sweden’s crown rose after their central banks broke with the growing caution of the world’s major monetary-policy makers, surprising traders who had expected more dovish signals.
TEHRAN, Young Journalists Club (YJC)-The kiwi was the stand-out performer after the neutral tone of the Reserve Bank of New Zealand’s policy announcement, which came as hopes for a breakthrough in talks between the United States and China to end their trade war boosted riskier assets.
The Swedish crown also stormed higher after the Riksbank said the economic outlook had not changed much since December and it would stick to its plan to lift interest rates in the second half of 2019.
“The Fed’s policy pivot isn’t shared by every central bank in the world, and markets have reacted to ‘business as usual’ from both the RBNZ and Riksbank,” said Kit Juckes at Societe Generale.
The kiwi rallied as much as 1.7 percent to $0.6852 as traders rushed to cover short positions. Sweden’s crown rose 0.7 percent against the euro to 10.42 and 0.6 percent versus the dollar to 9.208.
Signaling another major policy shift for the Federal Reserve after it put off raising rates further, Cleveland Fed President Loretta Mester said on Tuesday the central bank would make plans to stop letting its bond holdings diminish.
(For a graphic on risk reversals, click tmsnrt.rs/2UUEVYD)
TRADE HOPES
Elsewhere, investors chased riskier assets on signs of a detente in the U.S.-China trade war. That led to a pause in the dollar’s recent rally after an eight-day winning streak ended overnight.
The dollar index rose marginally to 96.788. It stood at $1.1318 against the euro, slightly firmer.
Source: Reuters
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