Sharechat Logo

NZ dollar rises as risk appetite improves, election jitters abate

Monday 18th September 2017

Text too small?

The New Zealand dollar gained as investors became more sanguine about the outcome of Saturday's election, regardless of who wins and as risk appetite improved in Asia.

The kiwi traded at 73.12 US cents at 5pm in Wellington from 72.80 US cents at the start of the day and from 72.88 cents in New York on Friday. The trade-weighted index was at 76.08 from 75.91 on Friday.

Investors had sold down kiwi on pre-election jitters after the polls showed a very close race.  Some of those nerves, however, look to have abated after the Labour Party said it would implement no tax reforms recommended by a working group before the 2020 election. 

"The market was a bit short kiwi with all the uncertainty around the election" but after the announcement that nothing is going to happen for three years markets are less rattled by the idea of a change in government, said Martin Rudings, a senior dealer at OMF.   "There is less risk in this election now on a Labour victory than what there was a few days ago," he said. 

Against that backdrop, "the kiwi could have more on the topside," he said although "the market doesn't feel stable across the board."  

Across Asia, investors appeared to be relieved the weekend passed with no new provocation by North Korea, which also helped shore up the kiwi. However, "I am not sure that the North Korean thing has died down much," said Rudings. Markets will be keeping a close watch on the UN General Assembly this week, in particular as US President Donald Trump is slated to address the body for the first time. Trump is expected to seek support for tough measures against North Korea.

The US Federal Reserves' policy meeting on Tuesday and Wednesday will also remain firmly in focus.  "That's probably what's going to dominate. I don't think anyone is going to charge off and take things on a massive run ahead of that," he said. 

The Kiwi was trading at 53.80 British pence from 53.65 pence on Friday in New York and at 91.10 Australian cents from 91.07 cents. It traded at 61.23 euro cents versus 61 euro cents and at 81.27 yen from 80.79 yen. It was at 4.7872 yuan from 4.7736 yuan.

The two-year swap rate rose 3 basis point to 2.22 percent while 10-year swaps rose 6 basis points to 3.23 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:

NZ dollar eases on technical factors, buoyed by higher dairy prices
RBNZ eyes Westpac Australia money laundering failures
Heritage buys Golden Healthcare; not mystery Metlife suitor
Alliance margins improve as swine fever boosts global meat prices
RBNZ eyes Westpac Australia money laundering failures
Precinct eyes new developments as Commercial Bay keeps to revised schedule
End to Tower's three year dividend drought in sight
Vital Healthcare's manager appoints new independent director
Argosy lifts first-half profit 15.2% on valuation gains
Metlifecare attracts 'credible' bidder after biggest trading day in 2 1/2 years

IRG See IRG research reports