Aussie dollar reverses losses after RBA minutes, NZ$ steady

09/14/2020 | 10:32pm

SYDNEY, Sept 15 (Reuters) - The Australian dollar reversed early losses on Tuesday after highly anticipated minutes from the central bank's September monetary policy meeting stopped short of signalling a further cut to the cash rate while the New Zealand dollar was steady.

The Aussie was last up 0.2% at $0.7304 from $0.7268 before the minutes were released.

The minutes showed the Reserve Bank of Australia (RBA) will maintain its "highly accommodative settings" as long as required and will continue to consider how further policy measures could support the economy.

However, it did not indicate a policy action was imminent.

The Aussie has meandered since hitting a two-year high of $0.7413 on Sept.1 as market pricing shifted rapidly in favour of a cut to the cash rate to 0.1% after its September meeting.

Interest rate futures are still almost fully pricing in a 15 basis point rate cut in October.

The RBA last eased the cash rate to an all-time low of 0.25% in an emergency meeting in March and at its September board meeting hinted at additional policy measures to support an economy reeling from its worst contraction in almost a century.

The remark stoked speculation of further easing.

Across the Tasman Sea, the New Zealand dollar was fetching $0.6700, above a recent trough of $0.6602, partly on news the government would lift coronavirus restrictions across the country on Sept. 21.

New Zealand government bonds were slightly weaker with yields up about 1 basis point at the long end of the curve.

Australian government bond futures were little changed, with the three-year bond contract at 99.710 and the 10-year contract at 99.078. (Editing by Shri Navaratnam and Ana Nicolaci da Costa)

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