TOKYO: New Zealand's currency surged to a year high Thursday after the central bank left rates unchanged, while the dollar remained under pressure on fading hopes for a summer US rate hike.
The Kiwi jumped more than two percent to 71.35 US cents after New Zealand's central bank left interest rates at a record low of 2.25 percent.
The Reserve Bank of New Zealand has lowered its benchmark rate five times in the past year but cited Auckland's red-hot housing market as a reason for staying put in June.
Meanwhile, the chances of a Federal Reserve rate rise in the summer were crushed on Friday by data showing the US economy added a quarter of the jobs expected in May.
The central bank meets next week but dealers do not forecast a rise until September at the earliest, while a Bank of Japan meeting will also be in focus.
Fed chief Janet Yellen has said her outlook on the world's top economy was still bright but that any rate hike -- a plus for the dollar -- would be gradual.
"Until the US economy can make the case for a rate rise, the dollar will be at risk of slipping further," Joe Manimbo, an analyst with Western Union Business Solutions, told Bloomberg News.
Andres Jaime, a foreign-exchange strategist at Barclays, added: "June and July are off the table (for a rate hike) -- the probability of the Fed deciding to do something in those meetings is extremely low."
In Tokyo, the dollar slipped to 106.80 yen, from 106.99 in New York Wednesday afternoon.
The euro rose to $1.1400 from $1.1393 while it eased to 121.75 yen from 121.89 yen in New York.
The single currency had gained in US trading as the European Central Bank stepped into uncharted territory Wednesday when it began to buy bonds issued by companies, in a bid to kickstart eurozone inflation.
In other trading Thursday, South Korea's won edged up 0.11 against the dollar despite a surprise cut in the country's interest rate to a record low.
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