Sharechat Logo

New Zealand dollar rises from 4-month low vs Aussie, sticks to tight range

Monday 13th February 2017

Text too small?

The New Zealand dollar bounced from a four-month low against the Australian dollar as some investors found the levels attractive after a sharp sell-off last week.

The kiwi rose to 93.92 Australian cents as at 5pm in Wellington from 93.55 Australian cents at 8am and 93.66 cents in late New York trading on Friday.

New Zealand's currency was still 1.2 percent lower against its trans-Tasman counterpart from a week earlier as rising commodity prices and a rosier economic outlook from the Reserve Bank of Australia stoked demand for the Aussie dollar. 

"After such a hard sell-off last week, it's not surprising it's attracted some buying interest at these levels," said OMF private client manager Stuart Ive.

The New Zealand dollar fell sharply last week after New Zealand's central bank indicated rates would remain on hold for some time to come. The kiwi traded at 72 US cents from 71.99 cents on Friday in the US and Ive said it was likely to stick to a 71.70-to-72.20 US cent range until there were some catalysts to move it one way or the other. It was at 78.51 on a trade-weighted index basis versus 78.37 on Friday.

Ive said local traders largely overlooked news that retail spending rose a seasonally adjusted 2.7 percent in January after two months of zero movement, the biggest monthly gain since December 2006, with increases across all six industries and said Tuesday's food price index data was unlikely to have much impact.

The light data calendar means investors will continue to watch headlines out of the US for direction, and Ive there may be some signs that US President Donald Trump is "toning down" his rhetoric, which could be positive for risk. Any detail on Trump's tax-plan is also likely to shore up the greenback. 

Ive noted the US dollar gained against the yen in Asian trading, after Japanese economic growth was weaker than expected and after Trump's weekend meeting with Japanese Prime Minister Shinzo Abe. The kiwi gained to 82.02 yen from 81.43 yen last week. 

The local currency traded at 57.63  British pence compared with  57.49 pence in Asia on Friday and rose to 67.80  euro cents from 67.59 cents. It increased to 4.955 Chinese yuan from 4.9477 yuan.

New Zealand's two-year swap was unchanged at 2.3 percent while 10-year swaps fell 1 basis point to 3.42.  

 

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:

MARKET CLOSE: NZ shares up as A2, Genesis rally, while Pushpay drops
NZ dollar heads for weekly 0.7% gain, all eyes on possible US govt shutdown
Trustpower affirms earnings guidance as wholesale prices stay high; notes low hydro levels
OceanaGold's Macraes gold mine misses production target
Prime Minister Jacinda Ardern pregnant, Winston Peters to step in as acting PM
January 19th Morning Report
NZ dollar gains as threat of US govt shutdown weighs on greenback
While you were sleeping: Wall St pauses after Dow climbs to record
MARKET CLOSE: NZ shares mixed, Fisher & Paykel, Air NZ drop while Kiwi Property rebounds
NZ dollar steadies after sharp fall, US bear run may not be over

IRG See IRG research reports