Wednesday 31st January 2018
|Text too small?|
The New Zealand dollar rose ahead of US President Donald Trump's first State of the Union address and Australian inflation data that's expected to validate expectations of a rate hike across the Tasman this year. Sentiment was helped by Standard & Poor's affirming New Zealand's credit rating.
The kiwi increased to 73.30 US cents as at 8:30am in Wellington from 73.15 cents late yesterday. The trade-weighted index advanced to 74.65 from 74.56.
Trump's speech to the Congress, titled "Building a safe, strong and proud America" is expected to set out his priorities for jobs, infrastructure, immigration, trade and national security and he may also give his view on the relative strength of the greenback. Meanwhile, Australia's trimmed mean consumers price index is expected to have gained 1.8 percent year-on-year in the fourth quarter, unchanged from the third quarter rate and enough to keep on track expectations of a quarter-point rate hike from the Reserve Bank of Australia this year.
"The USD appears to be in some sort of consolidation mode over recent days, after the steady fall we’ve seen since mid-December," said Jason Wong, currency strategist at Bank of New Zealand. "With a 25 basis point rate hike by the RBA fully priced this year, the market will be sensitive to any downside surprise, as we saw with last week’s NZ CPI figure."
Global ratings agency Standard & Poor's has affirmed New Zealand's 'AA' sovereign credit rating, saying the new government's plans to lift spending will be a bigger contributor to growth in the future, but are funded through cancelled tax cuts and won't undermine the outlook.
Also on the radar for traders, the Federal Open Market Committee kicked off its two-day meeting - the last for chair Janet Yellen before Jerome Powell takes over. While the FOMC is not expected to announce a rate hike on Wednesday, it is widely expected to raise its target rate during its March meeting. Meantime, US nonfarm payrolls are due out on Friday and probably grew by 180,000 jobs in the latest month while the unemployment rate fell to 4 percent, economists forecast.
The local currency traded at 90.70 Australian cents from 90.54 cents yesterday. It declined to 4.6325 yuan from 4.6331 yuan and fell to 51.81 British pence from 52.07 pence. It was little changed at 59.12 euro cents and traded at 79.75 yen from 79.78 yen.
No comments yet
Telstra to join Southern Cross Cable, diluting Spark shareholding
Transpower faces sanction for handling of 2017 outage
Credit unions seek scale and profitability in five-way merger
Napier Port profit hits record as it handles record 5.1M tonnes of cargo
Govt scraps CTO role in favour of 'a small group'
MBIE involvement in spying on political parties an 'affront to democracy': SSC
NZ business confidence gets a pre-Christmas lift
Aged care, tourism first in line for temporary migrant sector agreements
Moody's puts its stamp of approval on the government's finances
RBNZ chief economist McDermott leaving central bank to join Motu