The New Zealand dollar resumed its upward march after data showed the US economy contracted an annualised 32.9 per cent in the June quarter and the US dollar fell to its lowest level since May 2018 against a basket of major currencies.

The kiwi was trading at 67.05 US cents at 5pm in Wellington from 66.44 cents at the same time yesterday and well up on last week's close in New York at 65.79 cents. The trade-weighted index was at 72.57 from 72.23.

"It's just a continuation of a weak US dollar – all the major currencies gained overnight and as Asia opened today the US dollar had another down leg," said Pat Gilligan, a director at Forex. The US dollar index has lost 5 per cent in the past month.

"It looks like there's more coming. Fed policies and stimulus measures are weakening the US dollar and the momentum is gaining," Gilligan said.


On top of the weak GDP data, weekly US unemployment claims rose again in a further sign the economy is stalling.

US lawmakers also appear at an impasse over another stimulus bill even as reported covid-19 infections remain high and deaths climb.

A key sticking point is whether to continue paying the unemployed a US$600 a week bonus on top of the benefits they receive and which have just run out.

Compounding all that, President Donald Trump's suggestion that the presidential election set for Nov. 3 could be delayed because of the coronavirus epidemic also undermined confidence in the big dollar, even though Trump has no power to change the election date.

The NZ dollar was trading at 92.83 Australian cents from 92.62 cents at 5pm yesterday, at 69.93 yen from 69.81 yen, at 56.36 euro cents from 56.44 cents, 51.07 British pence from 51.20 pence, and 4.6852 Chinese yuan from 4.6490 yuan.

The bid-price on the two-year swap rate was at 0.1400 per cent from 0.1830 per cent yesterday while the 10-year swap was at 0.6100 percent from 0.6600 per cent.