Sharechat Logo

NZ dollar gains vs greenback on Fed's 'gradual hikes' view, at 6-month high vs Aussie

Thursday 22nd February 2018

Text too small?

The New Zealand dollar rose against the greenback after the Federal Reserve minutes showed policymakers still favour gradual rate hikes. It rose to a six-month high versus the Aussie after weaker economic data across the Tasman.

The kiwi gained to 73.77 US cents after the Fed minutes were released at about 8am NZ time from 73.34 cents late yesterday. The trade-weighted index rose to 75.66 from 75.31.

The minutes of the Fed's Jan. 30-31 policy meeting, the last with Janet Yellen as chair, said committee members agreed that an improved near-term economic outlook "increased the likelihood that a gradual upward trajectory of the federal funds rate would be appropriate. Investors had been looking for any hardening of the language from the Fed, which currently projects three rate hikes this year, with the first seen as soon as next month. There was a greater consensus that inflation would pick up.

"The market will look for clarification from the minutes on whether this change in wording signals any change to its tightening plans," said Nick Smyth, interest rate strategist at Bank of New Zealand, in a note ahead of the release of the minutes.

Traders will now be watching out for a speech by New York Fed President Bill Dudley tonight, although the topic is Puerto Rico, and an address by Atlanta Fed President Raphael Bostic to a banking conference for any further insights into the timing and scale of Fed rate hikes.

The kiwi rose to 93.69 Australian cents and earlier touched 93.76 cents, the highest since early August last year, from 93.31 cents yesterday. The kiwi had fallen against the Aussie yesterday after the release of ostensibly stronger wage data but the Australian dollar subsequently dropped after figures showed the seasonally adjusted estimate for total construction work done fell 19 percent in the December quarter. Overnight the Aussie was the worst performing G10 currency.

The kiwi rose to 59.64 euro cents from 59.46 cents and gained to 52.62 British pence from 52.42 pence. It climbed to 79.18 yen from 79.02 yen and gained to 4.6684 yuan from 4.6525 yuan.


  General Finance Advertising    

Comments from our readers

No comments yet

Add your comment:
Your name:
Your email:
Not displayed to the public
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:

Hallenstein seeks new CEO; shares fall
Tower affirms earnings guidance, notes increased digital upgrade cost
NZME targets positive earnings from paywall in 2 years; profit falls
Precinct raising $150M from an underwritten placement and retail offer
NZ dollar dips from 13-day high as US holiday keeps markets quiet
February 19th Morning Report
NZ dollar rises on optimism for China-US trade deal
Steel & Tube recovery to include $5.6M of 2nd-half cost savings
Open Country challenges validity of Fonterra's 2018 milk price
Guest night growth slows; overseas visitors spent less time in North Island

IRG See IRG research reports