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.
No comments yet
MARKET CLOSE: NZ shares mixed ahead of Anzac Day holiday; A2, Synlait fall further, Fisher & Paykel bounces
USX: Introducing Pharmazen Limited
NZ dollar falls to 3 1/2 month low as rising US interest rates bring trading back to fundamentals
Gold Report 23rd April 2018
Gold Report 16th April 2018
Gold Report 9th April 2018
Gold Report 3rd April 2018
Gold Report 26th March 2018
Gold Report 19th March 2018
Gold Report 12th March 2018