Sharechat Logo

NZ dollar pushes higher on US dollar profit taking as uncertainty continues

Tuesday 24th January 2017

Text too small?

 The New Zealand dollar continued to push higher on US dollar profit taking in the wake of US President Donald Trump's latest comments on trade and the border tax.

The kiwi gained to 72.44 US cents as at 5pm in Wellington from 72.12 cents at 8am and 72.02 cents late Monday in Wellington. The trade-weighted index was at 78.96 from 78.65 yesterday. 

The local currency "is stronger, but it's all about the US dollar. The market just got a little ahead of itself and now we are seeing some profit taking," said Tim Kelleher, head of institutional foreign exchange sales for ASB Bank.  The greenback gained strongly after Trump's election on a possible increase in infrastructure spending but has pulled back on ongoing uncertainty given that details remain thin. Kelleher said he expects the kiwi to continue to push higher against the US dollar, with support now around 72 US cents and resistance at 73.  He said a key level for the TWI is 79.50. 

News that Trump formally ordered the US to withdraw from the Trans-Pacific Partnership trade deal was largely expected but investors are watching to see just how far the protectionist policies go, Kelleher said.  HSBC Australia and New Zealand chief economist Paul Bloxham said he expects the greenback to gain over the long term as the Trump administration will be positive for US growth. He underscored, however, there is still "considerable uncertainty" around what Trump will deliver. 

ASB's Kelleher said with little data, either at home or abroad, to push it around, the kiwi will remain at the mercy of US dollar moves. Looking ahead, he said investors will be watching for Australia's inflation data Wednesday, followed by New Zealand's consumers price index for the fourth quarter, due on Thursday and expected to show annual inflation has returned to the Reserve Bank's target band.

New Zealand's two-year swap rate was unchanged at 2.37 percent, and 10-year swaps were unchanged at 3.43 percent.

The kiwi increased to 95.50 Australian cents from 95.13 cents Monday and advanced to 4.9622 Chinese yuan from 4.9318 yuan. It rose to 67.29 euro cents from 67.04 cents Monday. In the other direction, it eased slightly against the British pound to 57.83 British pence from 57.97 pence. The local currency slipped to 81.60 yen from 81.83 yen Monday. 

 

 

BusinessDesk.co.nz



  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