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.
No comments yet
NZ dollar treads water through Northern Hemisphere holidays
Air NZ to tweak 'cattle class', use machine-learning to target individualised fares
ComCom investigates BNZ over CCCFA disclosure breaches
Motor Trade Finance profit falls as Turners takes more business in-house
Air NZ profit warning follows plane upgrade announcements
Cooperative Bank profit drops 8.7% after cutting customer fees
Southbase makes shareholder support public
Evolve awash with red ink on goodwill writedown
Air NZ commits around $2B to buy eight new Boeing Dreamliner 10-series planes
Fisher & Paykel Healthcare tops $1 billion in FY revenue, upbeat about FY2020