Tuesday 9th January 2018
|Text too small?|
The New Zealand dollar rose to a two-month high against the euro as investors remain upbeat at the start of 2018 ahead of US corporate earnings, which will offer a gauge to the strength of the world's biggest economy.
The kiwi rose to 60 euro cents as at 8am in Wellington from 59.65 cents yesterday. It was little changed at 71.76 US cents from 71.78 cents yesterday.
The euro slipped 0.6 percent, shrugging off upbeat data showing positive European confidence, as investors remain optimistic about global growth in a low inflation environment at the start of the year. Stocks on Wall Street edged up to new records overnight on optimism fourth-quarter earnings will support the outlook for the US economy, which showed strong enough growth last year to warrant a gradual increase in interest rates. Investors anticipate the Federal Reserve will hike the federal funds rate three times this year.
"Risk sentiment still remains very strong amid strong global growth, continued modest inflation and low volatility," Bank of New Zealand interest rate strategist Nick Smyth said in a note. "The NZD has been supported by the strong global growth backdrop and high risk appetite this year."
BNZ's Smyth said market positioning may also be underpinning support for the kiwi dollar, with Commodity Futures Trading Commission figures showing a near-record level of speculative short positions in New Zealand dollar futures. A short position is where an investor bets an asset will fall on the expectation they can sell it and buy it back at a lower price.
With no local data today of note, market sentiment will probably remain the main influence on the currency.
The trade-weighted index rose to 74.70 from 74.57 yesterday and the kiwi traded at 91.54 Australian cents from 91.43 cents. It was little changed at 81.11 yen from 81.24 yen yesterday and rose to 4.6616 Chinese yuan from 4.6569 yuan. The local currency traded at 52.92 British pence from 52.91 pence yesterday.
No comments yet
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
Nib NZ first-half earnings slide 30% as claims outpace policy growth
Customer satisfaction in NZ banks rises despite Australian scandals
Perky services sector in Janary soothes fears over cooling economy
PFI doubles 2018 profit on valuation gains, underlying earnings fall short
Steel & Tube turnaround continues with 49% jump in first-half net profit
February 18th Morning Report