Sharechat Logo

NZ dollar little changed in Asia as traders weigh progress on US tax reform, Flynn testimony

Monday 4th December 2017

Text too small?

The New Zealand dollar was little changed as traders digested progress on US tax reform and news that a former aide to Donald Trump agreed to cooperate with a probe into possible Russian election interference.  

The kiwi dollar traded at 68.59 as at 5pm versus 68.66 US cents as at 8am in Wellington and from 68.85 cents in late New York trading. The trade-weighted index was at 72.38 from 72.58 in New York.

News that Senate passed its tax-cut bill in the early hours of Saturday helped bolster US dollar sentiment, although it will now have to merge its legislation with that passed last month by the House of Representatives before it can be signed into law by the president.  The US dollar, however, was held back by concerns after news that former national security adviser Michael Flynn pleaded guilty to lying to the FBI about his contacts with Russia and ABC News reported that he was willing to testify that President Donald Trump directed him to make contact. 

Martin Rudings, senior dealer foreign exchange at OMF in Wellington, said trading was very tepid as "Asia hasn't really worked all of that out."  However, while markets may be jittery about the Flynn situation Rudings expects the US tax reform to "be the main story" as Europe and the US open up later in the global trading day.  He said the kiwi could return to last week's low of around 68.10 US cents.

Looking ahead, he said attention will focus on jobs data in the US at the end of this week and the upcoming US Federal Reserve's rate decision. While a rate hike is fully priced in it will still likely be US dollar positive, he said.

Domestically a speech Tuesday by Acting Governor Grant Spencer on "low inflation and its implications for monetary policy" will be closely watched for any direction on future rate increases. 

The kiwi was at 90.18 Australian cents from 90.03 cents on Friday in New York.

It fell to 50.90 British pence from 51.14 pence and declined to 57.78 euro cents from 57.99 cents. It rose to 77.31 yen from 77.24 yen and fell to 4.5352 yuan from 4.5568 yuan.

New Zealand's two-year swap rate rose 1 basis point to 2.13 while the 10-year swap rate rose 1 basis point to 3.08 percent.


Father's Day SOON! Crazy Deals on ALL IRG Yearbooks - More than 50% OFF - $19.99 for 44th IRG Yearbook 2018-2019

  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:

NZ dollar rises after Orr talks up the economy
Comvita posts $27.7m net loss on goodwill write-downs
Buyers emerge for Denton Morrell client book
WEL reviewing capital structure of fibre business
Cavalier announces strategic collaboration with NZ Merino Company
Delegat continues to invest after record year
Kiwibank's annual profit eases as fee income drops
TIL lifts operating earnings, watching for slowdown
Vector profit slides 44% on struggling HRV writedown
Steel & Tube returns to the black but says margins are squeezed

IRG See IRG research reports