NZ dollar hits three month high

Independent treasury adviser Peter Cavanaugh thought the currency move was because of the less-than-hawkish comments Federal Reserve chair Jerome Powell had made during a speech in Washington yesterday.

“I don’t want to overtighten,” Powell had said, adding that the time for moderating the pace of rate increases could come “as soon” as the Fed’s December meeting.

“You could also read [into it] that he's been given a copy of the Adrian Orr guide to raising interest rates and creating a recession,” Cavanaugh said.

He said it was “strange” to see a big currency move immediately after Thanksgiving, but events in the past two-and-a-half years had shown “old patterns don’t really apply any more”.