New Zealand dollar surges surprise RBNZ, dollar stable

By Patrick GrahamLONDON (Reuters) - An increase of 1.5 percent for the New Zealand dollar after interest rates were not kept waiting was by far the largest movement in the major currency markets on Thursday, while the US dollar .S. It reached a five-week low against the yen.The Reserve Bank surprised some investors who had been betting on a rate cut and worries about rising house prices and emerging inflation pressures cooled expectations that the bank will cut soon.While growth remains volatile and growth of the extremely low prices, along with their counterparts from Australia and Canada, the kiwi dollar has been steadily recovering since reaching long-term lows in January this year.In early European trade it was up 1.4 percent to $ 0.7121, compared to a maximum of $ 0.7148 hit in Asia time."The kiwi went crazy after the RBNZ kept rates on hold," said Tobias Davis, head of corporate treasury sales of Western Union in London."The governor's comments Wheeler centered around being a driver data decisions, inflation expectations anchor and the fact that high property prices are a concern. We believe downside risks remain, along with the possibility of a cut in August. "Currency markets in the developed world have been fighting for the direction of this week after the US dollar He saw its worst day in six months on the back of surprisingly poor employment figures last Friday.The index that tracks the strength of the US currency against a basket of peers he has fallen every day this week, but losses have been limited and was almost flat on Thursday.Still, expectations of further rises this year in interest rates by the Federal Reserve are back close to bottoming out, along with global growth expectations and the dollar lost half a percent to ¥ 106.32 by 0730 GMT."Dollar-yen has traded in a range 105-111 in the last two months as markets continually reassess the timing of rate hikes from the Fed," analysts at UBS Wealth Management in a note.They argued increased coverage of FX exposure by major Japanese pension funds would weigh on any rebound in the dollar, as the dollar stabilized at or around ¥ 110 in the next 12 months if the Fed to raise rates gradually."A larger rebound can not be ruled out, but is likely to be met with hedging activities", they said.The dollar was 0.3 percent to 106.63 yen, retreating towards one-month low of 106.35 on Monday.