Dollar gains as traders push down greenback on return from holidays

The New Zealand dollar advanced on a weaker greenback as sentiment waned after US traders returned to work following the Independence Day holiday on Friday.

The kiwi rose to 87.58 US cents at 8am in Wellington from 87.19 cents yesterday. The trade-weighted index gained to 81.49 from 81.21 yesterday.

In late afternoon trading in New York, the Dow Jones Industrial Average fell 0.37 percent, the Standard & Poor's 500 index shed 0.42 percent, while the Nasdaq Composite Index slumped 0.72 percent. Both the Dow and the S&P 500 had ended July 3 with record closing highs, while markets were closed on July 4 for the Independence Day holiday. Some analysts are adjusting their forecasts for US interest rates following last week's better-than-expected government jobs report

"The greenback is weaker," said Imre Speizer, senior market strategist at Westpac Banking Corp in New Zealand. "Americans came back from holidays in a pessimistic mood and pushed down interest rates, pushed down equities, pushed down their dollar."

The kiwi will probably remain in its recent 87.15 US cent to 87.85 cent range today, Speizer said.

Today, traders will be eyeing the New Zealand Institute of Economic Research second quarter survey of business opinion scheduled for release at 10am, which is expected to show some softness, Speizer said.

Reserve Bank of New Zealand governor Graeme Wheeler spoke to a business audience in Auckland this morning, and will deliver another speech tomorrow morning. The speeches won't be released publicly.

The New Zealand dollar advanced to 93.38 Australian cents from 93.14 cents yesterday ahead of the release of NAB business confidence survey for June, scheduled for 1:30pm New Zealand time.

The kiwi gained to 64.36 euro cents from 64.17 cents yesterday after a report showed German industrial output slid for a third month in May.

The local currency increased to 51.11 British pence from 50.85 pence yesterday and advanced to 89.21 yen from 89.01 yen.

(BusinessDesk)

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