Dollar outlook: Upward bias likely again for kiwi

The New Zealand dollar may gain this week as buyers return at lower levels while keeping a wary eye on commodity prices, business confidence and the US earnings season.

The kiwi recently traded at 83.66 US cents from 84.25 cents on Friday.

It may trade between 83.00 US cents and 84.70 this week, with a bias to the upside, according to a BusinessDesk survey of four traders and strategists. The range is similar to last week, when the currency traded to 84.61 cents.

"I'm going positive again for the week for the kiwi but I'm less confident of it than last week," says Imre Speizer, senior markets strategist at Westpac Banking Corp.

Iron ore prices reversed on Friday and the Chinese stock market was worth watching this week, he says.

The biggest local statistic is the consumer price index on Friday, expected to come in zero or 0.1 percent for the December quarter, and the NZIER business confidence survey tomorrow will also be of interest.

US earnings will be important for the American stock market but expectations are muted, with the Dow Jones Industrial Average advancing 0.4 percent in the last week, as did the Standard & Poor's 500 Index.

But further gains will be dependent on the read on the economy provided from reports by Goldman Sachs, JPMorgan Chase, Bank of America, Citigroup and Morgan Stanley this week.

Earnings for financial companies in the S&P 500 grew 16 percent in the fourth-quarter, according to data compiled by Bloomberg.

"A lot of the moves last week were down to the Bank of Japan adding a big stimulus to their economy, which was added to on Friday," says Stuart Ive, currency strategist at HiFX.

Alex Sinton, senior dealer at ANZ, says investors are still hungry for the New Zealand dollar and exporters were possibly under-covered.

Talk of people starting to fix mortgage interest rates may also have a positive influence on the kiwi.

The yield at the long end of the New Zealand interest rate curve may rise if there is a flood of people fixing mortgage rates as banks seek to protect themselves. The higher yield will attract investors to the kiwi, Mr Sinton says.


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NZ Market Snapshot


Sym Price Change
USD 0.7050 0.0035 0.50%
AUD 0.9465 0.0056 0.60%
EUR 0.6310 0.0051 0.81%
GBP 0.5503 0.0075 1.38%
HKD 5.4925 0.0279 0.51%
JPY 78.3890 0.0010 0.00%


Commodity Price Change Time
Gold Index 1256.4 -2.470 2017-05-25T00:
Oil Brent 51.8 -2.520 2017-05-25T00:
Oil Nymex 48.9 -2.480 2017-05-25T00:
Silver Index 17.2 0.070 2017-05-25T00:


Symbol Open High Last %
NZX 50 7434.5 7441.6 7434.5 0.10%
NASDAQ 6207.0 6211.5 6205.2 0.02%
DAX 12604.4 12611.5 12621.7 -0.15%
DJI 21070.2 21088.8 21083.0 -0.05%
FTSE 7517.7 7554.2 7517.7 0.40%
HKSE 25671.0 25724.4 25630.8 0.03%
NI225 19798.5 19801.6 19813.1 -0.64%
ASX 5789.6 5789.6 5789.6 -0.65%