Friday 6th January 2017
|Text too small?|
The New Zealand dollar climbed above 70 US cents for the first time in three weeks as Chinese authorities looked to curb capital outflows, sending the yuan higher. and minutes to the Federal Reserve's last policy review raised uncertainty about the path of US interest rates, sapping demand for the greenback. The kiwi rose to 70.24 US cents as at 8am in Wellington from 69.89 cents yesterday. The trade-weighted index was little changed at 77.61 from 77.59.
China's yuan posted its biggest gain against the world's reserve currency as the Chinese government attempted to slow the flow of capital out of Asia's largest economy, causing widespread selling of the greenback yesterday. That added momentum to a drop in the US dollar index, a measure of the greenback against a basket of currencies, as investors reassessed the outlook for Fed rate hikes after minutes to last month's policy meeting showed officials were unsure what level of stimulus president-elect Donald Trump's spending programme and tax reform would inject into the world's biggest economy.
"The Chinese government have been trying to stem the flow and the latest moves made it incredibly expensive to hold short positions in the yuan, so we've just seen a rash of positioning: the yuan surged, the US dollar sinks and everything else goes up against the US dollar," said Stuart Ive, senior dealer foreign exchange at OMF in Wellington. "The kiwi's move to the upside looks a little exhausted, and I wouldn't be surprised to see it consolidate into the end of the week."
Ive said the kiwi will probably be capped at 70.60 US cents on a very near-term basis in what are still thin markets.
Investors will be watching US non-farm payrolls on Friday in Washington, which are expected to show the US economy added about 175,000 jobs last month.
The local currency edged lower to 95.62 Australian cents from 96.81 cents yesterday and declined to 81.18 yen from 81.38 yen. It fell to 56.33 British pence from 56.70 pence yesterday and was little changed at 66.30 euro cents from 66.42 cents. The kiwi slipped to 4.8374 yuan from 4.8406 yuan yesterday.
No comments yet
Heartland Market Update
Steel & Tube Fy20 Trading Update
Further Contract Win Strengthens Scott Technology’s Position In Mining Sector
China’s Assertiveness Is Becoming a Problem for Its Friends, Too
New Talisman - Chairman’s Address to AGM 2020 August 6, 2020
T&G reports its 2020 Interim Results
Gold price hits $2,000 for first time on Covid
TruScreen strengthens its market presence in central and eastern Europe
Refining NZ announces non-cash impairment
Ryman Healthcare COVID-19 update Victoria