Monday 23rd January 2017
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The New Zealand dollar was little changed as investors await more detail on US President Donald Trump's plans to accelerate growth in the world's largest economy.
The kiwi traded at 71.56 US cents as at 8am in Wellington from 71.66 cents on Friday in New York and 71.67 cents at the close of local trading last week. The trade-weighted index slipped to 78.50 from 78.69.
The US dollar index, a measure of the greenback against a basket of currencies, slipped 0.3 percent after Trump's inauguration. The 45th US president successfully campaigned on a major infrastructure spend and tax reform, with more protectionist trade and immigration policies. That has supported the greenback since the November election as investors speculated those policies would generate inflationary pressures and spur the Federal Reserve to raise interest rates faster than previously anticipated, although details of those plans are still largely unclear.
"While US data continues to look reasonable and consistent with ongoing tightening from the Fed this year, for markets to again push a stronger USD theme (which has of course been a widely held consensus), it appears as though more details of Trump’s economic plans are required; more than just rhetoric is now needed," ANZ Bank New Zealand senior economist Philip Borkin said in a note. "If, and until that occurs, it is difficult to envisage much in the way of NZD weakness, particularly on a TWI basis, given still strong domestic economic credentials."
With no local data and Wellington on holiday for its anniversary day, ANZ's Borkin said New Zealand will have a quiet start to the week.
The kiwi fell to 81.67 yen from 82.07 yen on Friday in New York and declined to 4.9182 Chinese yuan from 4.9217 yuan. It slipped to 94.59 Australian cents from 94.75 cents and traded at 66.77 euro cents from 66.88 cents. The kiwi was little changed at 57.83 British pence from 57.86 pence last week.
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