NZ dollar slips from three-week high as Fed officials seek hike this year

Monday 21st September 2015

The New Zealand dollar fell from a three week high reached in New York trading after US Federal Reserve officials said they expected to raise interest rates this year after the Fed kept rates near zero last week.

The kiwi traded at 63.95 US cents as at 8am, having reached as high as 64.55 cents in New York, from 63.93 cents at the close of trading last week. The trade-weighted index was little changed at 68.91 from 69.03.

John Williams, president of the Federal Reserve Bank of San Francisco told the Fox Sunday Morning Futures programme that the decision not to raise interest rates last week was "a close call" and he expected the Fed to gradually start raising rates most likely this year. Two other Fed presidents both indicated their support for raising rates. The US dollar rebounded on Friday in what some traders called a technical rally after disappointment at a dovish Fed statement last week that cited global uncertainty, seen partly as a reference to China. Stocks ended the week lower on Wall Street.

"The kiwi tried to rally again on Friday night," ANZ Bank New Zealand economist Philip Borkin and currency strategist Sam Tuck said in their morning note. The local dollar will continue to be "driven by risk sentiment."

Data today includes migration figures, which should show continued strong inbound migrants, while Westpac Banking Corp is scheduled to release its consumer confidence survey for the third quarter.

The kiwi traded at 76.81 yen from 76.77 yen on Friday, and fell to 55.67 euro cents from 56.68 cents. It fell to 41.16 British pence from 41.20 pence on Friday. The local currency was steady at 88.90 Australian cents from 88.93 cents, and slipped to 4.0639 Chinese yuan from 4.0703 yuan.

BusinessDesk.co.nz

Comments from our readers

No comments yet