Sharechat Logo

NZ dollar jumps above 74 US cts as US Treasury secretary jawbones greenback

Thursday 25th January 2018

Text too small?

The New Zealand dollar jumped above 74 US cents for the first time since September after US Treasury Secretary Steven Mnuchin talked up the trade benefits of a weaker greenback, while Commerce Secretary Wilbur Ross said his nation was ready for a trade war. 

The kiwi climbed to 74.28 US cents as at 8am in Wellington from 73.60 cents yesterday and has gained 4.6 percent so far this year. The trade-weighted index rose to 75.69 from 75.43 yesterday. 

The Dollar Index, a measure of the greenback against a basket of currencies, dropped 1 percent after Mnuchin told reporters at the World Economic Forum in Davos that a weaker dollar is good for US trade, and that short-term weakness isn't a concern for the White House, a contrast to the long-held 'strong dollar' position from previous Treasury secretaries. Ross later talked down characterisations the US was departing from the 'strong dollar' policy, while also saying the US was prepared for a trade war. President Donald Trump this week announced new tariffs on washing machines and solar panels. 

"It was already on the ropes, but comments from US Treasury Secretary Mnuchin welcoming a lower USD sent the greenback tumbling further," ANZ Bank New Zealand senior economist Philip Borkin said in a note. "Has kiwi run too hard? We are starting to think so. However, momentum is a hard thing to stand in the way of right now."

Local inflation data will be watched closely with the December quarter consumers price index expected to have increased at an annual pace of 1.9 percent. The Reserve Bank has signalled the official cash rate will stay unchanged until mid-2019, although a growing number of central banks around the world are starting to move away from ultra-loose monetary policy settings. 

The local currency traded at 91.96 Australian cents from 91.99 cents yesterday and rose to 4.7265 Chinese yuan from 4.7026 yuan. It slipped to 52.20 British pence from 52.43 pence yesterday and traded at 59.83 euro cents from 59.76 cents. The kiwi was little changed at 80.97 yen from 80.92 yen yesterday. 

(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:

High Court orders reinvestigation of Chinese steel imports
Govt needs to consider ratepayer burden in 3 waters policy, Mahuta says
Heartland needs access to wholesale funding to grow Australian reverse mortgages
NZ annual current account deficit widest in nine years
Synlait Milk almost doubles annual profit on high value product growth
Consumer confidence falls to six-year low in September quarter
Near-record throughput at Marsden Point
September 19th Morning Report
NZ dollar falls vs Aussie on early signs of moderation in US-China trade war
Pyne Gould restarts $22M Perpetual Trust litigation five years after sale

IRG See IRG research reports