NZ dollar recovers vs yen, greenback as North Korea fears ebb

Wednesday 30th August 2017

The New Zealand dollar rose against the yen and the greenback as fears eased that North Korea's firing of a missile over Japan’s northern island of Hokkaido would lead to escalating tensions on the Korean peninsula.

The kiwi climbed to 79.56 yen as at 8am in Wellington from 78.58 yen late yesterday. The kiwi rose to 72.51 US cents from 72.25 cents.

The UN Security Council is to hold an emergency meeting at the request of Japan which was scheduled for late Tuesday. Japanese Prime Minister Shinzo Abe had called the missile test an "outrageous action" and "an unprecedented, grave and serious threat" to Japan. However, financial markets opted to focus on the strength of the economy, including a Conference Board report showed its consumer confidence index rose to 122.9 in August, up from 120 in July.

"Overnight, sentiment has recovered somewhat as the market speculates tension will not escalate further, bringing some reversal of earlier moves," said Doug Steel, an economist at Bank of New Zealand, in a note.

In New Zealand, Reserve Bank governor Graeme Wheeler is to deliver his final speech today before retiring, although Steel said no clues to monetary policy were expected given the topic is "Reflections on the stewardship of the Reserve Bank".

That leave US labour market data as the big economic event as well as updates from flooding and other damage in the Houston area from Hurricane Harvey.

The kiwi dollar rose to 60.58 euro cents from 60.32 cents and gained to 91.23 Australian cents from 91.12 cents. It gained to 56.12 British pence from 55.82 pence and rose to 4.7817 yuan from 4.7735 yuan.

The trade-weighted index rose to 75.92 from 75.66.

(BusinessDesk)

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