-->
Sharechat Logo

NZ dollar holds gains as efforts to soothe Brexit pains calm investors

Thursday 6th September 2018

Text too small?

The New Zealand dollar held overnight gains as positive headlines overnight about Brexit negotiations boosted global risk appetite. 

The kiwi traded at 65.84 US cents at 5pm in Wellington from 65.97 cents at 8am, and up from 65.55 cents yesterday. The trade-weighted index advanced to 71.59 from 71.26 yesterday.

The local currency benefitted from improving risk appetite after Bloomberg reported the British and German governments pulled back on key Brexit demands, potentially easing the path for the UK to strike a deal with the European Union. While the headlines were denied by German officials, risk appetite remained buoyant, keeping the greenback under pressure. 

"It was up overnight on a falling US dollar, some of which was due to the Brexit headlines. Emerging currencies have stabilised for now, helping a risk-on mood for the NZD," said Imre Speizer, head of NZ strategy at Westpac Banking Corp.

The kiwi was also been supported by reports the US and Canada have made progress in talks to revise the North American Free Trade Agreement.

Domestically, investors are looking forward to an on-the-record speech from Reserve Bank governor Adrian Orr tomorrow entitled "Geopolitics, New Zealand and the Winds of Change" for clues about whether he still thinks a rate cut is possible in New Zealand. Investors are currently pricing in a 50 percent chance. 

The kiwi rose to 91.76 Australian cents from 91.16 cents yesterday after Australia & New Zealand Banking Group and Commonwealth Bank of Australia joined Westpac in raising variable mortgage rates across the Tasman. The Reserve Bank of Australia kept the target cash rate at 1.5 percent on Tuesday, noting that mortgage rates were still lower than a year earlier. 

The local currency increased to 73.32 yen from 73.11 yen yesterday and gained to 4.5015 Chinese yuan from 4.4819 yuan. It was almost unchanged at 50.99 British pence from 50.97 pence yesterday and traded at 56.60 euro cents from 56.54 cents.

New Zealand's two-year swap was unchanged at 1.96 percent. The 10-year swap decreased 1 basis point to 2.79 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:

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
FIRST CUT: Port of Tauranga lifts 1H profit 4%
NZ dollar starts the week with a tailwind as positive US-China trade talks boost sentiment
Tax Working Group's capital gains proposal keenly awaited
MARKET CLOSE: NZ shares dip as global trade jitters weigh on A2, F&P
NZ dollar set for weekly gain after Reserve Bank surprise

IRG See IRG research reports