The New Zealand dollar ticked up against the US dollar on global relief after French centrist politician Emmanuel Macron and the far-right Marine Le Pen made it through the first round of the presidential election, although it lost ground against the euro.
The kiwi rose to US70.33c at 5pm today from US70.19c on Friday in New York and dropped to 64.76c from 65.53c as markets were cheered by the result in France, with Macron widely tipped to win the final vote.
The election result saw the euro briefly touch US$1.0940, the highest since November, and Reuters reported opinion polls put Macron ahead by more than 20 points, a lead so large that a repeat of Brexit is seen as highly unlikely.
The US dollar remained under pressure amid scepticism regarding US President Donald Trump's fiscal stimulus promises and "the weakening US dollar is pushing NZD/USD higher, targeting the 71.00 area this week. Also helping are rising dairy prices, higher inflation, and extremely short speculative NZD positioning," said Westpac senior FX strategist Imre Speizer.
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Advertise with NZME.Trump has reportedly said the White House will unveil a "massive tax cut" but did not give more details.
Trading was extremely quiet and "liquidity wasn't helped by the fact that we are between Sunday and Anzac Day so a lot of people aren't here today," said Tim Kelleher, head of institutional foreign exchange sales at ASB Bank. "If you weren't trading the euro against the US, sterling or the yen, you wouldn't have needed to come to work today," he said.
The kiwi would likely continue to benefit from improving risk appetite, with most equity market futures looking stronger overnight, said Kelleher.
The kiwi traded at 54.94 British pence from 54.87p last week. It rose to 77.40 from 76.69, also helped by improving risk appetite. It was trading at A93.04c from A93.20c on Friday. The two-year swap rate rose 2 basis points to 2.33 per cent and 10-year swaps gained 5 basis points to 3.37 per cent.
