Coy investors keep kiwi where it is

  • 16/11/2015
Coy investors keep kiwi where it is

By Paul McBeth

The New Zealand dollar was little changed against the greenback as investors continue to weigh up whether the Federal Reserve will hike interest rates next month.

The kiwi traded at 65.30 US cents at 5pm in Wellington from 65.21 cents at 8am and 65.44 cents on Friday in New York. The trade-weighted index was almost unchanged at 71.28 from 71.27 last week.

Investors will be watching US data this week for more signs growth in the world's biggest economy is robust enough to warrant an interest rate hike when the Federal Open Market Committee meets next month.

Traders are pricing in a 70 percent chance of an increase, and will be monitoring a series of speeches by Fed officials to get any steer on the central bank's thinking.

"The recent data over the last two weeks has been much better than expected," said Grant Bodle, senior FX dealer at HiFX in Auckland.

The kiwi fell to 79.93 yen at 5pm in Wellington from 80.24 yen on Friday in New York, and gained to 60.87 euro cents from 60.69 cents last week.

Government data on Monday showed New Zealand's consumer spending rose faster than expected in the September quarter, led by a pick-up in car purchases, while a private survey showed services sector activity expanded at a slower pace in October.

New Zealand's two-year swap rate fell four basis points to 2.73 percent at 5pm in Wellington, and the 10-year swap dropped six basis points to 3.6 percent.

The local currency declined to 4.1635 Chinese yuan from 4.1708 yuan last week, and edged up to 42.91 British pence from 42.75 pence. It was little changed at 91.70 Australian cents from 91.73 cents on Friday in New York.