Kina may weaken against US dollar

Business, Normal

THE kina may see some mild declines in the weeks ahead as the festive season nears, provided the Australian dollar does not threaten domestic inflation, according to an ANZ market report.
But any move again on the topside should not be ruled out.
The local currency had slightly depreciated against the US dollar in the interbank market last week on build up of import activities.
The low volume of export inflows in recent weeks enticed the Central bank to provide some support, but did not avoid a 0.1% decline in the interbank market.
Having remained firm over the past two weeks with a mild decline last week indicated that kina/US dollar may rest from the topside pursuit in the near term.
Investors showed less appetite for bills for two consecutive weeks including last week.
The soft demand saw 28-day CB bill rate rose 19 basis points to 6.47%, up 44 basis points from the recent low at 6.03% seen late last month.
The 91 and 182 days bill rates also rose last week. However, 63 and 364 days declined to 6.08% and 7.93%, respectively.
A total of K100 million worth of treasury bills was auctioned in the market of which K50 million was new issue.
Market showed less appetite to invest in treasury bills last week.
Central banks from US, Eurozone and UK all kept their monetary policy loose at their meetings last week. 
Another 25 basis points cash rate rise in Australia to 3.50% this month gave the Aussie dollar a widening rate premium and assist Aussie dollar/US dollar to rise to above US$0.91 from US$0.89 beginning the previous week.