Sharechat Logo

NZ dollar sticks to tight range, eyes on US for direction

Thursday 5th July 2018

Text too small?

The New Zealand dollar stuck to a very tight range against the greenback in Asian trading as markets await key events in the US for direction. 

The kiwi traded at 67.68 US cents as at 5pm in Wellington from  67.61 cents at 8:30am and 67.65 cents late yesterday. The trade-weighted index was at 72.44 from 72.28.

Trading was quiet partly due to the overnight Independence Day holiday in the US but also ahead of minutes from the latest Federal Reserve policy meeting, the imposition of US tariffs on US$50 billion worth of imports from China and non-farm payrolls data in the US Friday. Investors will be watching to see how China responds as fears of a trade war continue to cloud markets. 

"It's really waiting on those things before deciding which way to lurch," said Ross Weston, a senior trader at Kiwibank. Weston, however, said he expects it to remain range bound between 67 US cents and 68 cents until there is a significant driver. He also said the kiwi is finding some support as investors pare back short positions. Going short means betting on a currency to decline and short positions have recently swelled to levels reached only a few times since 2010.  

On the domestic front, Weston said the market is waiting for second-quarter inflation data due later this month, which may be stronger-than-expected would support the kiwi, given the market has priced in a possible rate cut after the latest cash rate review from the central bank.

The kiwi dollar traded at 4.4931 yuan from 4.4821 yuan yesterday and rose to 91.83 Australian cents from to 91.38 cents yesterday. It traded at 74.73 yen from 74.70 yen. It was at 58.06 euro cents from  57.99 euro cents and eased 51.18 British pence from 51.24 pence.

New Zealand’s two-year swap rate fell 1 basis point to 2.13 percent while 10-year swaps were unchanged at 3 percent.


  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 eases as US-China trade war, Brexit saga drag on
OceanaGold less confident in regulatory regime
INFINZ says RBNZ bank capital proposals lack analysis and scrutiny
Spark scolded for misleading customers on broadband price hike
Zespri annual profit jumps 77% on higher kiwifruit sales, increased licensing
Freightways says express package growth slowed in 2H, may flow into FY2020
BUDGET 2019: NZ debt target to be more flexible from 2022
Argosy annual profit climbs 36% on revaluation gains, pays slightly bigger dividend
NZ-owned banks says RBNZ capital proposals will make it harder to compete
Sanford earnings hit by vessel impact from crew death

IRG See IRG research reports