The kiwi traded at 65.74 US cents at 5pm. Photo / 123RF
The kiwi traded at 65.74 US cents at 5pm. Photo / 123RF
The New Zealand dollar gained against the greenback after markets were cheered by news that the UK and the European Union may have struck a tentative Brexit deal on financial services.
The kiwi traded at 65.74 US cents at 5pm in Wellington from 65.20 US cents at 8am and65.42 cents yesterday. The trade-weighted index was at 72.21 from 72.07.
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British and European negotiators have reached tentative agreement on all aspects of a future partnership on services, as well as the exchange of data, government sources said, according to The Times. The deal would give financial services firms continued access to European markets after Brexit.
"Basically the Brexit news was the big thing that moved it," said Ross Weston, head of trading for Kiwibank. "It is not the whole deal but at least it's a start and that obviously gave the market a bit of enthusiasm," he said.
Weston noted, however, the kiwi remains locked in a fairly tight range. The market is "probably sleeping with one eye open" ahead of the central bank's monetary policy review in New Zealand next week, particularly given that recent domestic data has been better than expected.
US jobs data overnight Friday could also push the local currency around, with higher wages seen as a key component underpinning the Federal Reserve's plans to raise interest rates.
The kiwi eased slightly against the Aussie after strong September trade numbers in Australia. The Australian Bureau of Statistics reported a trade surplus of A$3.02 billion ($3.2b) versus the A$1.7b expected. The kiwi traded at 92.19 Australian cents from 92.31 cents yesterday.
The kiwi rose to 4.5799 Chinese yuan from 4.5575 yuan and traded at 74.19 yen from 74.06 yen. It was at 57.94 euro cents from 57.67 cents yesterday and fell to 51.15 British pence from 51.49 pence.
New Zealand's two-year swap rate rose 2 basis points to 2.02 per cent; the 10-year swaps rose 3 basis points to 2.85 per cent.
