NZ dollar slips amid low liquidity on US Thanksgiving holiday

Friday 27th November 2015

The New Zealand dollar edged lower amid low liquidity during the US Thanksgiving holiday.

The kiwi slipped to 65.67 US cents at 8am in Wellington, from 65.87 cents at 5pm yesterday. The trade-weighted index was at 71.42 from 71.54.

Currency markets are experiencing low volumes and poor liquidity in the second half of this week as traders take an extended break around Thursday's US Thanksgiving holiday. Traders may also be unwilling to take positions ahead of the last key US data releases next week on employment and manufacturing before the Federal Reserve makes a decision on interest rates following its Dec. 15-16 meeting, with speculation rising that it will hike. Ahead of that, the Reserve Bank of Australia and the European Central Bank are due to review policy next week, with the Reserve Bank of New Zealand up for review the following week.

"Thanksgiving markets were very quiet, and we would expect the week to end on the same note too," ANZ Bank New Zealand senior rates strategist David Croy and senior FX strategist Sam Tuck said in a note. "With little going on in offshore markets and no data due out here today, it looks like we’re set for a fairly lazy Friday.

"Looking forward to next week, we would expect a significant pickup in volatility with the last of the major US data releases before the Fed – expected to support the case for ‘lift-off’."

The local currency is likely to trade between 65.40 US cents and 66.30 cents today, ANZ said.

The New Zealand dollar was little changed at 43.51 British pence from 43.54 pence, slipped to 61.92 euro cents from 62.01 cents, edged lower to 90.78 Australian cents from 90.98 cents, dropped to 80.50 yen from 80.74 yen, and fell to 4.1969 yuan from 4.2085 yuan.

BusinessDesk.co.nz

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