Investing.com - The New Zealand dollar was sharply higher against the U.S. dollar on Tuesday, tracking strong gains in Australia’s dollar after the Reserve Bank of Australia dropped its bias towards easing rates at its latest rate review.
NZD/USD hit 0.8163, the highest since Friday and was last up 0.88% to 0.8159.
The pair is likely to find support at 0.8100 and near-term resistance at 0.8180, Friday’s high.
The Australian dollar rallied after the RBA left rates on hold at 2.5% on Tuesday, saying “the most prudent course is likely to be a period of stability in interest rates."
The central bank said fourth quarter inflation was higher-than-expected, adding that the rise in inflation might be due in part to the lower exchange rate.
The kiwi remained vulnerable after weak U.S. factory data reinforced negative investor sentiment, following a selloff in emerging markets on Monday.
The Institute for Supply Management said its manufacturing index fell to a seven-month low in January, as new orders slumped.
The disappointing data sparked concerns over the outlook for the economic recovery, ahead of Friday’s U.S. jobs report for January, after December’s report showed that the economy added far fewer jobs than expected.
Elsewhere, the kiwi was sharply higher against the yen, with NZD/JPY advancing 0.92% to 82.36 and fell against the stronger Australian dollar, with AUD/NZD up 0.82% to 1.0909.