The kiwi dollar was trading at US69.10c at 5pm versus US69c late on Thursday. Photo / File
The New Zealand dollar remained out of favour yesterday, falling 1.7 per cent on the week against the greenback as markets gear up for a rate increase from the US Federal Reserve.
The kiwi dollar was trading at US69.10c at 5pm versus US69c late on Thursday and US70.30c early on
Monday. It also eased 1.3 per cent on a trade-weighed index basis over the week and was trading at 75.94.
"The kiwi has held about that US68.90c level, helped by some exporter buying," said Tim Kelleher, head of institutional foreign exchange sales for ASB Bank. Domestic data was largely overlooked as markets waited for US jobs data later in the global trading day, with investors expecting an addition of 200,000 non-farm payrolls.
If that data is as expected or better and the Fed is "reasonably hawkish" at its rate review next week, the kiwi might fall further. However, given that the market is widely expecting a Fed rate increase and at least two more hikes this year, the kiwi is unlikely to plunge.
Kelleher underscored that the US dollar story is dominating. Even the euro failed to really fire after ECB president Mario Draghi said further measures to support the Eurozone's economic recovery and boost inflation are becoming less likely. "I was surprised it didn't spike higher on that but it's all US dollar dominated right now," said Kelleher.
