NZ dollar gains on greenback

  • 12/10/2015
NZ dollar gains on greenback

By Jonathan Underhill

The New Zealand dollar rose amid speculation inflation is tame enough in the US to prevent the Federal Reserve rushing to restore normal monetary conditions, including interest rates of more than zero, which has driven down the greenback.

The kiwi rose to 66.97 US cents at 5pm in Wellington today, from 66.80 cents at the start of the day and from 66.90 cents in New York on Friday. The trade-weighted index was little changed at 71.57 from 71.56.

"Everyone is coming to realise there is no inflationary pressure in the US and the numbers don't really stack up for them to raise rates in 2015," said Mitchell McIntyre, a senior corporate dealer at NZ Forex.

He said while 67 US cents is a "big level" for the kiwi, "the market seems to have enough momentum to take it a little higher from here."

The New Zealand dollar may trade in a range of 66.70 US cents to 67.40 cents in the next 24 hours, he said.

The kiwi traded at 91.30 Australian cents, from 91.25 cents in New York on Friday and down from 91.69 cents in Asia at the end of last week.

Traders are awaiting New Zealand inflation figures this week, which are expected to confirm increases in consumer prices are well below the level the central bank targets on average, over time.

The consumer price index fell to 0.2 percent in the third quarter from 0.4 percent three months earlier, according to a Reuters survey.

The kiwi fell to 4.2393 yuan from 4.2454 yuan on Friday in New York and traded at 80.48 yen from 80.38 yen. It was little changed at 58.88 euro cents and traded at 43.68 British pence from 43.69 pence.

The two-year swap rate was unchanged at 2.72 percent and 10-year swaps were unchanged at 3.57 percent.

NZN

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