By Swati Pandey
SYDNEY, Dec 12 (Reuters) - The New Zealand dollar rose to a
two-week high on Tuesday, adding to gains from the previous
session when the government appointed a new central bank
governor, while the Australian dollar held near a recent
The kiwi climbed as far as $0.6937, a level not
seen since late November. It rose more than 1 percent on Monday,
the biggest daily percentage gain since mid-August.
The rally came after national pension fund chief Adrian Orr
was named the new governor for the Reserve Bank of New Zealand
(RBNZ) for a five-year term, starting March 2018.
Investors cheered the announcement as Orr, a former central
banker, is seen a safe pair of hands who can likely avoid a
radical shake-up of monetary policy when changes come into force
A new Labour-led government has launched a review of the
RBNZ's mandate, intending to add maximising employment as a
policy goal alongside inflation.
"This appointment should act to somewhat soothe foreign
investor perceptions about the nature of the changes at the RBNZ
after the election," JP Morgan analyst Ben Jarman said in a note
"Orr's return delivers continuity through the transition to
the dual mandate," he added. "And his organizational experience
may make it easier for him to wrangle a monetary policy
committee with external members, as will be required under the
new decision-making structure."
Orr's appointment sent the kiwi dollar to a more than
two-month top against its Australian counterpart. The
Australian dollar was last down 0.2 percent against the kiwi for
its third straight session of losses.
Against the U.S. dollar, the Aussie loitered around
$0.7530, not far from a six-month low of $0.7501 touched last
The Aussie has been on a slippery slope since hitting a more
than 2-1/2 year peak of $0.8125 early September. It has since
posted weekly losses nine out of 13 times.
So far this year, the Aussie is still up 4.6 percent.
Investors next await a rate decision from the U.S. Federal
Reserve as well as its policy outlook for 2018. The Fed is
considered certain to raise rates on Wednesday and likely stick
to projections for three more hikes next year.
Just two more increases would take U.S. rates above those in
Australia for the first time since 2000.
New Zealand government bonds were barely changed.
Australian government bond futures were mixed, with the
three-year bond contract unchanged at 98.005. The
10-year contract added 2 ticks to 97.4450.
(Editing by Kim Coghill)
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