Dollar gains as US inflation data stokes reflation talk
The US consumers price index rose 2.5%, the biggest year-on-year gain since March 2012.
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The dollar rose after stronger than expected US inflation figures stoked talk of global 'reflation' which will hasten central bank moves to tighten monetary policy.
The kiwi advanced to 72.08USc at 8am in Wellington from 71.73USc late yesterday. The trade-weighted index rose to 78.49 from 78.11.
The US consumers price index rose 2.5% in the 12 months through January, the biggest year-on-year gain since March 2012, and faster than economists were expecting.
Other figures showed retail sales rose 0.4% last month, four times faster than expected. US stocks rose and bond yields gained after the data.
"Ultimately the pressure for higher rates is expected to remain in the face of the global reflation trade and signs that the NZ economy is going down a similar path," said Jason Wong, currency strategist at Bank of New Zealand. "The global reflation trade continued on the release of strong US CPI and retail sales data."
Traders will be watching for the ANZ consumer confidence report for February, a speech by Finance Minister Steven Joyce and the Crown accounts for the six months ended December today.
The kiwi rose to 57.88 British pence from 57.52 pence and gained to 68.07€c from 67.74€c. It rose to 93.60Ac from 93.42AC and gained to 82.33 yen from 81.96 yen. The kiwi rose to 4.9494 yuan from 4.9233 yuan.
(BusinessDesk)
Jonathan Underhill
Thu, 16 Feb 2017
Thu, 16 Feb 2017
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Dollar gains as US inflation data stokes reflation talk
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