Sharechat Logo

NZ dollar pushes higher in Asian trading as US dollar remains out of favor

Monday 8th January 2018

Text too small?

The New Zealand dollar rose in Asian trading as risk appetite remained strong and the US dollar remains out of favor, further weighed by weaker-than-expected jobs data overnight Friday. 

The local currency traded at 71.78 US cents as at 5pm in Wellington versus 71.63 cents as at 8am in Wellington and 71.67 cents on Friday in New York. The trade-weighted index was at 74.57 from 74.44 Friday. 

The US dollar has struggled to gain traction so far this year and came under further pressure when data on Friday showed the world's biggest economy added 148,000 jobs in December, missing expectations. Martin Rudings, senior dealer foreign exchange at OMF in Wellington, said, however, the greenback's weakness is puzzling, given the tax package and expectations for further rate increases in the US. He noted that trading is very light, which increases volatility. 

Meanwhile, the kiwi may come under some pressure as it looks like the Thomson Reuters core commodity CRB Index "might have topped out on Friday when it gapped lower after quite a few increases took it too new highs. It looks like a reversal could be in play," he said. 

Both the New Zealand dollar and the Australian dollar have benefited from rising commodity prices in recent sessions, with the Australian dollar just below a three month high against the greenback and the kiwi up around 2 percent against the US dollar since just before the Christmas holiday. 

While Asia have overlooked the possible slide in commodity prices, there could be some impact in London or New York, said Rudings. "I think it's a warning sign. If the commodity index is going to turn down then the kiwi and the Aussie won't be far behind it," he said.

With little local data on the immediate horizon, investors will be watching for US consumer prices and retail sales data on Friday in the US. 

The local currency traded at 81.24 yen versus 81 yen Friday and at 4.6569 Chinese yuan from 4.6470 Chinese yuan and rose to 91.43 Australian cents from 91.21 cents on Friday in New York. It traded at 59.65 euro cents from 59.55 cents last week and at 52.91 British pence from 52.78 pence.

New Zealand’s two-year swap rate was unchanged at 2.17 percent while the 10-year swap was unchanged at 3.12 percent.

(BusinessDesk)

  General Finance Advertising    

Comments from our readers

No comments yet

Add your comment:
Your name:
Your email:
Not displayed to the public
Comment:
Comments to Sharechat go through an approval process. Comments which are defamatory, abusive or in some way deemed inappropriate will not be approved. It is allowable to use some form of non-de-plume for your name, however we recommend real email addresses are used. Comments from free email addresses such as Gmail, Yahoo, Hotmail, etc may not be approved.

Related News:

MARKET CLOSE: NZ shares shrug off Synlait slump, join global rally
NZ dollar sticks to a tight range ahead of 2Q GDP data
NZ Shareholders' Assn elevates capital market concerns to PM
High Court orders reinvestigation of Chinese steel imports
Govt needs to consider ratepayer burden in 3 waters policy, Mahuta says
Heartland needs access to wholesale funding to grow Australian reverse mortgages
NZ annual current account deficit widest in nine years
Synlait Milk almost doubles annual profit on high value product growth
Consumer confidence falls to six-year low in September quarter
Near-record throughput at Marsden Point

IRG See IRG research reports