The stoush will come to a head on Thursday in Washington when the US reaches its borrowing limit. Photo / AP
The stoush will come to a head on Thursday in Washington when the US reaches its borrowing limit. Photo / AP
The New Zealand dollar has continued to edge up amid the ongoing stand-off between US legislators which is threatening a default on debt obligations of the world's biggest economy.
A BusinessDesk survey of nine traders and strategists predicts the local currency may trade between 81.80 US cents and 84.50 centsthis week. Six expect the currency to remain unchanged, two predict it will decline, and one says it may gain.
The kiwi rose to 83.29 US cents at 5pm in Wellington from 82.83 cents at 8am, little changed from 83.16 cents at the close of trading in New York on Friday. The trade-weighted index increased 77.33 from 77.13 on Friday in Wellington.
Trading was light with Hong Kong, Japan and the US closed for public holidays, in an environment where all eyes are on the stand-off in American politics as the Republican-controlled House of Representatives is refusing to sign-off on President Barack Obama's Federal budget. The stoush will come to a head on Thursday in Washington when the US reaches its borrowing limit, which if it fails to secure an increase, means it will potentially default on its obligations.
"It's trading in a fairly tight range for the kiwi - there's a mild upside bias given how close to the crunch-time for the debt ceiling,'' said Michael Johnston, a senior trader at HiFX in Auckland. "The markets think sanity will prevail.''
Traders will be looking at Reserve Bank deputy governor Grant Spencer's speech tomorrow on the housing market for any clues as to the immediate impact of the central bank's lending restrictions on low-deposit mortgages. Local house prices rose 7.8 percent last month from September 2012, according to Real Estate Institute of New Zealand figures published today.
The New Zealand dollar rose to 87.95 Australian cents at 5pm in Wellington from 87.62 cents last week ahead of tomorrow's release of the Reserve Bank of Australia's minutes of its last meeting.
The kiwi slipped to 51.12 British pence from 51.95 pence on Friday and traded at 61.41 euro cents from 61.31 cents. The local currency edged up to 81.87 yen from 81.74 yen on Friday.
