Dollar holds loss as Ukraine tension stokes risk aversion

The New Zealand dollar held its loss in local trading as heightening tensions in Ukraine weighed on investors' appetite for higher-yielding assets.

The kiwi traded at 83.53 US cents at 5pm in Wellington from 83.54 cents at 8am, down from 84.21 cents on Friday in New York. The trade-weighted index fell to 78.40 from 78.65 at the New York close.

Stocks across Asia fell as investors sold down risk-sensitive assets as political leaders condemned steps by Russia to take control of the Crimean peninsula in Ukraine. The Group of Eight leading economies have suspended preparations for this June's meeting in Sochi, Russia in protest over the moves, and US Secretary of State John Kerry is flying to Kiev, Ukraine to affirm his country's support for the Eastern European nation.

"The longer we don't see a topside break in the risk currencies, the more chance of going lower - the Aussie is looking very weak," said Alex Hill, head of dealing at HiFX in Auckland. "We've had plenty of things like this that haven't moved currency too much, but it makes an excuse" to sell risk-sensitive currencies, he said.

A BusinessDesk survey of 11 traders and strategists predicts the kiwi will trade between 81.80 US cents and 85 cents this week. Five expect the local currency to decline, three expect it to advance while three say it will likely be little changed.

Traders are pricing in a 4 percent chance of a rate cut at tomorrow's Reserve Bank of Australia policy review after recent data showed the economy wasn't recovering as quickly as anticipated. The kiwi traded at 93.70 Australian cents at 5pm in Wellington from 93.84 cents on Friday in New York.

That comes ahead of next week's New Zealand central bank meeting, where governor Graeme Wheeler is expected to embark on the first interest rate hike of a tightening cycle.

The local currency dropped to 84.68 yen at 5pm in Wellington from 85.28 yen at the New York close last week, and was little changed at 60.62 euro cents from 60.71 cents. It slipped to 49.87 British pence from 50.04 pence last week.

(BusinessDesk)


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NZ Market Snapshot

Forex

Sym Price Change
USD 0.7262 -0.0030 -0.41%
AUD 0.9461 -0.0049 -0.52%
EUR 0.6480 -0.0022 -0.34%
GBP 0.5584 -0.0021 -0.37%
HKD 5.6292 -0.0249 -0.44%
JPY 73.1640 -0.0180 -0.02%

Commods

Commodity Price Change Time
Gold Index 1326.9 -10.480 2016-09-27T00:
Oil Brent 46.5 -1.410 2016-09-27T00:
Oil Nymex 44.7 -1.260 2016-09-27T00:
Silver Index 19.2 -0.430 2016-09-27T00:

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Symbol Open High Last %
NZX 50 7260.4 7290.4 7252.9 0.52%
NASDAQ 5254.2 5306.8 5257.5 0.92%
DAX 10425.9 10518.4 10361.5 1.34%
DJI 18099.2 18238.1 18094.8 0.74%
FTSE 6807.7 6878.2 6807.7 0.87%
HKSE 23455.7 23619.7 23571.9 0.20%
NI225 16505.0 16515.8 16683.9 -1.31%
ASX 5405.9 5435.0 5405.9 0.12%