NZ dollar holds up as ructions in Washington weigh on global markets

Monday 24th December 2018

The New Zealand dollar opened the holiday-shortened week on a stable footing, having been sold off as a Federal government shutdown and divisions in the White House weighed on global markets.

The kiwi traded at 67.24 US cents as at 8.30am in Wellington from 67.17 cents on Friday in New York, down from 67.73 cents in Asia last week. The trade-weighted index was at 73.74 from 73.69 last week.

Stocks on Wall Street fell on Friday as investors digested the latest events in Washington. Policymakers didn't sign a funding bill, meaning the US Federal government shutdown may extend into the New Year. Meanwhile, US President Donald Trump forced his Defence Secretary Jim Mattis to step down two months earlier than expected after Mattis resigned over the president's decision to withdraw from Syria. Uncertainty in geopolitics has weighed on global markets in recent months, as investors struggle to assess what impact it will have on global growth.

"The markets have opened up on a pretty stable footing, despite the tumultuous events happening in the US with the government shutdown and the resignation and forcing-out of Secretary of Defence Mattis," said Stuart Ive, foreign exchange dealer at OMF. "The kiwi's had a reasonable start to the shortened holiday week."

No local data is scheduled for today in a shortened domestic trading session. Japanese markets are also closed for a bank holiday.

The kiwi traded at 95.54 Australian cents from 95.51 cents on Friday in New York and was at 4.6428 Chinese yuan from 4.6407 yuan. It traded at 74.61 yen form 74.67 yen last week and was little changed at 59.10 euro cents from 59.11 cents. The local currency edged up to 53.23 British pence from 53.11 pence last week.

(BusinessDesk)

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