Sharechat Logo

NZ dollar heads for 1% weekly gain as Italy fears subside; capped by global trade worries

Friday 1st June 2018

Text too small?

The New Zealand dollar is heading for a 1 percent weekly gain against the greenback, benefiting as fears of another Italian election receded, although concerns about global trade capped gains. 

The kiwi traded at 69.90 US cents as at 5pm in Wellington versus 69.98 cents at 8am and 69.84 cents late yesterday. It was at 69.16 US cents last Friday in New York. The trade-weighted index gained to 73.42 from 73.26 yesterday.

The local currency got a boost when the leader of Italy's Five Star Movement, Luigi Di Maio, and League leader Matteo Salvini said they had reached an agreement on terms for forming a new government, thereby avoiding fresh elections. However, fears of a possible global trade war were reignited as US allies took steps to retaliate after President Donald Trump moved ahead with tariffs on aluminium and steel imports from Canada, Mexico and the European Union. 

Tim Kelleher, head of institutional foreign exchange sales at ASB Bank, said while the kiwi is higher over the week "it is washing around with a bit of risk on, a bit of risk off. All it has done is reinforce the fact that 68.50-to-69 (US) cents is the bottom of the range and kiwi/Aussie's bottom of the range is 91.50 (Australian cents)," he said. The kiwi rose to 92.62 Australian cents from 92.38 cents late yesterday.

He said he expects the currency to eventually push lower against the greenback, given the US is lifting rates while they are firmly on hold in New Zealand. "I think the trend is lower (in the kiwi), it's just a question of timing," he said. 

Markets will now focus on US jobs data due later in the global trading day to predict the course of the Federal Reserve’s monetary policy. The data is expected to show the US added 190,000 jobs in May, up from 164,000 in the previous month, 

The kiwi traded at 59.86 euro cents from 59.85 cents. It rose to 76.26 yen from 75.85 yen and gained to 4.4842 yuan from 4.4722 yuan. It rose to 52.71 British pence from 52.50 pence.

New Zealand's two-year swap rate increased 1 basis point to 2.21 percent while 10-year swaps rose three basis points to 3.11 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 dip as global trade jitters weigh on A2, F&P
NZ dollar set for weekly gain after Reserve Bank surprise
Burger Fuel exploring sale after review questions listing merits
New net migration data to remain rubbery for quite some time
NZX to push sales this year after reshaping business dents 2018 profit
Slowing new orders growth weighs on January PMI
New NZ dry dock a basis for new industry - KiwiRail
Wellington Drive beats 2H sales forecast, will meet earnings guidance
NZIQS decides more training is the answer to past president's misconduct
February 15th Morning Report

IRG See IRG research reports