NZ dollar gains with other commodity currencies as greenback slips from 16-year high

Tuesday 22nd November 2016

The New Zealand dollar rose along with other commodity linked currencies as raw material prices gained and the greenback slipped from a 16-year high.

The local currency rose to 70.37 US cents as at 8am in Wellington from 69.99 cents late yesterday. The trade-weighted index rose to 77.56 from 77.29.

The US dollar index fell, having rallied to its highest levels since 2003 on the prospects of stimulatory US fiscal policy with Donald Trump in the White House and the Republican Party in control of the Senate and Congress.The CRB Index of 19 commonly traded commodities rose 2.3 percent, led by gains in crude oil and lifting currencies such as the kiwi and the Australian dollar. US benchmark equity indexes reached record highs overnight.

"The USD has lost some lustre after its strong run and is down against most of the majors," said Jason Wong, currency strategist at Bank of New Zealand, in a note. "The commodity currencies are all higher."

Investors are awaiting the release this week of the minutes from the latest Federal Reserve policy meeting in a week shortened in the US by the Thanksgiving holiday, which will see its markets closed on Thursday.

The kiwi rose to 78.30 yen from 77.71 yen late yesterday and traded at 4.8498 yuan from 4.8272 yuan. It slipped to 56.47 British pence from 56.71 pence as the pound strengthened after Prime Minister Theresa May said Britain may still be in the European Union after her departure in 2019. The kiwi rose to 66.37 euro cents from 66.03 cents and rose to 95.71 Australian cents from 95.59 cents.

BusinessDesk.co.nz

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