Kiwi holds last week's gains, steady against greenback

Monday 12th November 2018

The New Zealand dollar held steady against the greenback, maintaining last week’s gains, as investors await data slated for release today including domestic electronic card transactions and ANZ’s monthly gauge of inflation.

The kiwi traded at 67.33 US cents at 8.40 am in Wellington from 67.37 cents late Friday. The trade-weighted index was at 73.70 from 73.57.

“There is some decent resistance up near 68 US cents for kiwi,” ANZ Bank New Zealand economist Miles Workman and senior macro strategist Philip Borkin said in a note. “But unless we see broader risk-off contagion across markets, support is likely to emerge not far below here.”

The kiwi traded at 93.23 Australian cents from 93.27 cents Friday.

A string of better-than-expected economic data, notably last week’s report showing New Zealand’s unemployment rate dropped to its lowest level in a decade, have all but removed bets the Reserve Bank will cut interest rates any time soon. That has bolstered the kiwi at a time data in the US has underpinned expectations the central bank there will lift borrowing costs next month.

The kiwi was the strongest performing G10 currency on the week, climbing more than 1 percent against the US dollar, Bank of New Zealand interest rate strategist Nick Smyth said in a note.

On Monday, US bond markets and government offices are closed for the Veterans Day holiday; US stock markets are open. Federal Reserve Chair Jerome Powell is set to speak on Wednesday and investors will watch closely for any clues on the outlook for interest rates.

The New Zealand dollar traded at 52.13 British pence from 51.93 pence Friday, and was at 59.50 euro cents from 59.38. It was at 4.6809 Chinese yuan from 4.6747 yuan and at 76.61 yen from 76.72 yen.

(BusinessDesk)

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