Sharechat Logo

NZ dollar reaches new 2-month high overnight but Middle East tensions sap risk appetite

Thursday 12th April 2018

Text too small?

The New Zealand dollar rose to the highest in almost two months overnight although increased tensions in the Middle East eroded risk appetite, while upbeat Federal Reserve minutes and stronger US core inflation helped the greenback.

 

The kiwi traded at 73.53 US cents as at 8am in Wellington, having risen to as high as 73.78 cents overnight, from 73.46 cents late yesterday. The trade-weighted index edged up to 75.32 from 75.28.

 

Middle East tensions have been stoked by US President Donald Trump's tweet that US missiles "will be coming" to Syria in retaliation for the alleged use of chemical weapons to attack rebel positions and urged Russia not to support the "gas-killing animal" Syrian President Bashar al-Assad. Russia has said it will shoot down any missiles that put its positions under threat. Crude oil rose.

 

Meanwhile, minutes of the last Fed policy meeting show all policymakers saw the US economy strengthening and inflation picking up. That comes as data showed core CPI rose 2.1 percent year-on-year in March, as expected, and the fastest pace since February last year.

 

"Geopolitical tensions in the Middle East have capped risk appetite and helped push up oil prices to new 3-year highs," traders at HiFX said in a note. 

 

In New Zealand today the focus will be on a speech by Reserve Bank assistant governor McDermott on inflation targeting. It comes ahead of first-quarter inflation data due next week, which is expected to show pricing pressures remain soft.

 

"Against a backdrop of global policy tightening, the market doesn’t fully price an NZ rate hike until mid-2019, still more than a year away," said Jason Wong, currency strategist at Bank of New Zealand.

 

The kiwi fell to 4.6076 yuan from 4.6144 yuan late yesterday. It was little changed at 94.79 Australian cents from 94.76 cents and rose to 51.87 British pence from 51.79 pence. The kiwi traded at 59.48 euro cents from 59.40 cents and traded at 78.57 yen from 78.62 yen.

 

(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 dip as global trade jitters weigh on A2, F&P
NZ dollar set for weekly gain after Reserve Bank surprise
Burger Fuel exploring sale after review questions listing merits
New net migration data to remain rubbery for quite some time
NZX to push sales this year after reshaping business dents 2018 profit
Slowing new orders growth weighs on January PMI
New NZ dry dock a basis for new industry - KiwiRail
Wellington Drive beats 2H sales forecast, will meet earnings guidance
NZIQS decides more training is the answer to past president's misconduct
February 15th Morning Report

IRG See IRG research reports