Sharechat Logo

NZ dollar pares some losses against euro on profit taking

Monday 28th August 2017

Text too small?

The New Zealand dollar clawed back some of its losses against the euro, likely on some profit taking after it touched a 15-month low in early trading.

The kiwi dollar traded at 60.70 euro cents as at 5pm from 60.51 euro cents as at 8am in Wellington, having touched 60.43 cents this morning, the lowest since May last year. It was at 60.67 cents in New York on Friday. The local currency traded at 72.38 US cents unchanged from New York and up from 72.03 cents in Wellington on Friday, helped by US dollar weakness. 

Ross Weston, a senior trader at Kiwibank, said the kiwi is just grinding a bit higher against the euro after an "almighty move." The euro extended gains to a two-and-a-half year high against the US dollar on Monday after the European Central Bank president held back from talking down the currency at Jackson Hole.  The US dollar weakness was also on the back of disappointment there was no confirmation of another rate hike coming out of US Federal Reserve Chair Janet Yellen, also at Jackson Hole. 

"It's a disappointment trade," said Weston.  Given a dearth of domestic data, Weston said the local market may also be dwelling on its disappointment after last week's pre-election budget update saw lower growth targets and the election uncertainty may also be keeping the kiwi capped.

The trade-weighted index was little changed from 75.86 in Wellington at the end of last week.

The New Zealand dollar was at 91.17 Australian cents from 91.21 cents in New York on Friday and at 56.18 British pence from 56.07 pence. The kiwi traded at 4.8051 yuan from 4.8007 yuan and was at 78.96 yen from 79.10 yen.

The two-year swap rose 2 basis points to 2.18 and Weston expects it to remain range-bound at least in the short to medium term. "It all hinges on when the RBNZ decides, if they decide at all, that they are going to turn to a slightly more hawkish stance," he said. The central bank has signaled interest rates will remain on hold until well into 2019, with a quarter-point increase not fully predicted until March 2020. 

The 10-year swap was unchanged at 3.12 percent Weston said it is just steepening and flattening in line with moves in the US.

(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:

SML - Synlait Milk Limited - Trading Halt of Securities
AIA - Auckland Airport announces board chair changes
AIA - Auckland Airport announces board chair changes
CEN - Tauhara commissioning progress update
FPH initiates voluntary limited recall
March 28th Morning Report
KFL Celebrates 20 Years of Excellence in Investment Mgmt.
SVR - Savor FY24 Earnings Guidance & Change in Banking Partner
NZK - NZ King Salmon Investments Limited FY24 Results
March 27th Morning Report