Sharechat Logo

NZ dollar heads for 0.4% weekly gain as payrolls comes into view

Friday 2nd February 2018

Text too small?

The New Zealand dollar is heading for a 0.4 percent weekly gain against the greenback, which is trading around its lowest levels in more than three years against a basket of currencies.

The kiwi traded at 73.63 US cents as at 5pm in Wellington from 73.66 cents late yesterday and from 73.37 cents a weak ago. The trade-weighted index was at 74.99 from 74.96 late yesterday.

The US dollar index is at its lowest levels since December 2014, having weakened even in the face of a Federal Reserve committed to raising interest rates this year and stronger economic data including the ISM manufacturing index for January, out overnight and at 59.1 above expectations. Nonfarm payrolls for January, due out tonight, are expected to show the US added 180,000 jobs, from a 148,000 gain the previous month, while average hourly earnings gained 2.6 percent year-on-year, up from a 2.5 percent rate a month earlier.

"It was a very strong December and January for the kiwi and almost all of that is due to the US dollar falling," said Imre Speizer, senior market strategist at Westpac Banking Corp. The greenback "remains weak. There seems to be no news that helps it. The greenback is in a very dark place at the moment and there's no obvious sign that is going to change in the near term."

"While it is weak, kiwi-US tends to be supported and it potentially could run higher, reaching 74.40 US cents," Spiezer said. A weaker greenback gels with a protectionist Trump administration that wants to restore the gleam to 'Made in America', he said.

The Reserve Bank is scheduled to release its monetary policy statement next Thursday. No change is expected to the official cash rate, now 1.75 percent, although inflation has printed weaker than its most recent projections back in November, the trade-weighted index is stronger, and historical gross domestic product data has been revised up.

The kiwi didn't move much after reports showed a pickup in consumer confidence in January, an increase in December home-building consents and a slight dip in annual net migration from near record levels.

The local currency rose to 92.02 Australian cents from 91.48 cents late yesterday. The kiwi fell to 4.6270 yuan from 4.6320 yuan and gained to 80.72 yen from 80.53 yen. It fell to 58.94 euro cents from 59.28 cents and dropped to 51.62 British pence from 51.86 pence.

New Zealand's two-year swap rate was unchanged at 2.16 percent, while 10-year swaps rose 3 basis points to 3.27 percent. 

(BusinessDesk)

  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 fall as investor uncertainty weighs on exporters; F&P Health, A2 drop
NZ dollar drops below US68c on plan to up bank capital
Noel Leeming fined $200,000 for misleading consumers
Big four banks face stiffer capital requirements from RBNZ
Infratil signals A$50m investment in Canberra Data Centres
Govt provides $2.5 mln to develop Opotiki aquaculture
Labour co-ordinator role may alleviate kiwifruit labour shortage
NZ manufacturing activity chugs along in November
Australia's GWA lobs in $118M bid for Methven
Govt leaves door open for higher emissions price cap

IRG See IRG research reports