NZ dollar little changed against greenback

Photo / File
Photo / File

The New Zealand dollar was little changed against the US dollar, with attempts to rally on Wednesday quickly snuffed out by a risk-off attitude in Asia.

The kiwi dollar traded at 70.69 US cents at 5pm in Wellington from 70.76 cents late yesterday. The trade-weighted index rose was little changed at 77.70 from 77.68.

Tim Kelleher, head of institutional foreign exchange sales at ASB Bank in Auckland, said there had been some profit taking in the last twenty-four hours after the US dollar index climbed to its highest level since 2003 off the back of expectations that US president-elect Donald Trump would ramp up spending on infrastructure as well as cut taxes.

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"The kiwi tried to rally a little bit but failed. There's a bit of risk-off in Asia today, we've had another Chinese construction firm default on its bonds today, also there's obviously still talk of the vote recount in the United States." Kelleher said. "There's a lot on this week, the Reserve Bank's financial stability report is due out tomorrow, we've got the Italian referendum and we're coming up to month-end. It's going to continue to be a bit messy."

RBNZ governor Graeme Wheeler is to hold a media conference after the stability report is released tomorrow and may take the opportunity to comment on prevailing monetary conditions.

The kiwi rose to its highest level against the British pound in more than two weeks after Bank of England policymaker Gertjan Vlieghe gave a speech warning that raising interest rates would push up unemployment by around 200,000 and deliver little economic benefit.

Inflation is expected to rise above the Bank of England's 2 percent target in the coming months as the collapse in the value of the pound after Britain's vote to leave the European Union feeds through into higher prices for consumers.

The kiwi rose to 57.03 British pence from 56.57 pence yesterday and rose to 66.73 euro cents from 66.43 cents.

Against the Asian currencies, the kiwi was broadly flat against its trans-Tasman counterpart at 94.68 Australian cents from 94.67 cents and was also pretty much unchanged against the yen at 79.27 yen from 79.24 yen. It fell to 4.8720 yuan from 4.8865 yuan yesterday.

The two-year swap rate was flat at 2.2 percent and the 10-year swap rate fell 3 basis points to 3.17 percent.

- BusinessDesk

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