Kiwi holds gains on weak US data

By Sophie Boot

The kiwi traded at US73.97c as at 5pm today. Photo / NZME
The kiwi traded at US73.97c as at 5pm today. Photo / NZME

The New Zealand dollar is heading for a 1.6 per cent weekly gain as positive signals for the domestic economy contrast with weaker US data to keep the currency near a 16-month high.

The kiwi traded at US73.97c as at 5pm today, down from US74.57c on Thursday but up from US72.99c a week ago. The trade-weighted index fell to 78.37 from 78.84 on Thursday, to remain above the average 76 level the Reserve Bank has projected for the third quarter.

Government figures next Thursday are expected to show the economy grew 1 per cent in the second quarter, the fastest pace since the first quarter of 2014 and up from a 0.7 per cent pace in the first three months of this year.

That will come on top of a surge in prices of dairy products, which had been the weak spot in an economy being propelled by record migration and tourism and a bubbling property market.

By contrast, the US ISM non-manufacturing survey for August fell to 51.4, the lowest level since February 2010, and followed the previous week's ISM manufacturing survey, which fell below 50, a sign of contraction.

The currency fell to 65.60 euro cents from 66.30c on Thursday. The kiwi slid to A96.76c from A97.12c and declined to 55.49 British pence from 55.88p. It traded at 75.52 from 75.73 and fell to 4.9374 yuan from 4.9721 yuan.

New Zealand's two-year swap rate rose 4 basis points to 2 per cent and 10-year swaps jumped about 9 basis points to 2.47 per cent.

- BusinessDesk

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