Interest Rates Increase

Interest Rate Increase

Options traders see a 78 percent chance of a rate hike at this month’s policy meeting by the Reserve Bank of New Zealand on June 10, according to an index from Credit Suisse AG.

The Bank of Canada raised its key interest rate from a record low yesterday, the first Group of Seven central bank to do so since July 2008.

“Because the Bank of Canada raised rates last night it opens the door for New Zealand to raise rates next week,” said Tony Allen, head of currency trading at ANZ National Bank Ltd. in Wellington. “There are more reasons to buy the kiwi than sell it at the moment.”

Australia’s dollar rose after the government said the economy expanded 0.5 percent in the first quarter and revised up the pace of growth for the final three months of 2009. The currency added 1.7 percent to 76.85 yen.