Sharechat Logo

NZ dollar gains 2.3% on week as US dollar remains out of favor

Friday 8th September 2017

Text too small?

The New Zealand dollar was higher on the day and up 2.3 percent for the week as the greenback remained out of favor due to internal political issues, jitters around North Korea as well as several hurricanes.  

The kiwi was trading at 73.21 US cents as at 5pm versus 72.33 US cents as at 8am and from 72.02 cents. It was trading at 71.54 cents in New York last Friday. The trade weighted index climbed to 75.64 from 75.04.

The greenback has come under fire on jitters that Pyongyang could launch another missile test on Saturday, during a North Korean national holiday and as Hurricane Irma comes hard on the heels of Hurricane Harvey, with Irma due to hit South Florida sometime this weekend. The US dollar index, a measure of the greenback against a basket of currencies, was down 0.6 percent to 91.1, having hit its lowest level since January 2015. 

"The US dollar has continued to suffer aggressively as Asia and global markets have just hit the US dollar through the week," said Robert Rennie, chief currency strategist at Westpac Banking Corp in Sydney. "It has been relentless."   

Rennie warned, however, that a story began to circulate late in New York, driven by President Donald Trump himself, about eliminating the debt ceiling, or the statutory cap on the US Treasury Department’s authority to borrow.

"I am not sure that Asian markets are really trading on that story," he said. When Europe and the US begin trading and digest that news, "we might see a bit of a reversal," he said. 

While the kiwi has benefited from the slide in the greenback, Rennie said political uncertainty surrounding the Sept. 23 election, that might see a change in government, was holding it back. That uncertainty "has certainly seen the NZD move down the pecking list of currencies you could currently jump on," he said.  The latest Colmar Brunton poll showed National down 2 points to 39 percent and Labour unchanged on 43 percent, while Labour's Jacinda Adern leads National's Bill English as preferred prime minister by 34 percent to 33 percent.

The kiwi opened weaker against the euro after the European Central Bank lifted its forecast for economic growth and didn't signal any alarm about the euro's 15 percent gain against the greenback this year but pared those losses and was trading at 60.60 euro cents versus 60.39 cents late yesterday. 

It was at 90.25 Australian cents from 90.12 cents late yesterday and at 78.95 yen from 78.53 yen. It was at 55.73 British pence versus 55.20 pence and was at 4.7221 yuan from 4.6967 yuan. 

The two-year swap rate was unchanged at 2.13 percent while the 10-year swaps fell 4  basis points to 3.02 percent.

(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:

Sky CEO put on notice by chunky vote against salary share scheme
Unions gearing up to oppose 'market tests' on Fair Pay Agreements
Mandatory farm plans scorned as 'tick box' exercises
Kiwi dollar firms on weak US retail data, capped by rate-cut expectations
17th October 2019 Morning Report
SkyCity hoses down union claims over potential job losses
OPINION: Fair Payment Agreements and 'swallowing vomit' - the lot of the CTU
MARKET CLOSE: NZ shares gain; Restaurant Brands climbs on upbeat outlook
NZ dollar stalls after Bascand's rate cut comments
Bascand says RBNZ will consider changing bank capital proposals

IRG See IRG research reports