NZ dollar little changed before key NZ data, dairy auction, tax bill vote

Tuesday 19th December 2017

The New Zealand dollar was little changed ahead of domestic economic data and tonight's dairy auction and as the market awaits the progress of US tax reform through the US Senate and House.

The New Zealand dollar traded at 69.99 US cents as at 8am in Wellington from 70.10 cents late yesterday. The trade-weighted index slipped to 73.81 from 73.98.

Surveys of fourth-quarter consumer confidence from Westpac and the December ANZ Business Outlook today will provide an update on sentiment under the coalition government while the GlobalDairyTrade auction is the first since Fonterra Cooperative Group cut its milk payout forecast on Dec. 7. Tomorrow sees the release of the balance of payments for the third quarter and trade and migration for November, followed by third-quarter gross domestic product on Thursday.

"It’s hardly a gentle wind-down to Christmas," said Sharon Zollner, chief economist at ANZ Bank New Zealand. "Today the highlight is the ANZ Business Outlook, which will be closely watched given its plunge last month."

She said the kiwi may trade in a range of 69.20 US cents and 70.30 cents.

"Despite broad-based USD weakness, the NZD was a somewhat reluctant participant in the overnight rally in risk appetite, suggesting that it remains reasonably comfortable within current ranges for now," Zollner said.

Globally, US tax reform, which includes slashing the corporate rate to 21 percent, will be closely watched, as it faces votes in the House and Senate ahead of being signed into law by President Donald Trump. US benchmark stock indexes rose to record highs overnight on optimism tax cuts will stoke corporate profits and economic growth.

The kiwi dollar fell to 52.26 British pence from 52.56 pence yesterday and fell to 59.33 euro cents from 59.58 cents. It declined to 78.73 yen from 78.98 yen, fell to 91.49 Australian cents from 91.49 cents and dropped to 4.6298 yuan from 4.6337 yuan.

(BusinessDesk)

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