Dollar gains as US inflation weighs on greenback
Gains for NZ dollars on Fed expectations.
The New Zealand dollar gained after US inflation sapped expectations the US Federal Reserve will hike interest rates at this week's meeting.
This weighed on the greenback and comes ahead of local data which will likely show slowing economic growth.
The kiwi rose to 63.66USc at 8am in Wellington from 63.48c yesterday. The trade-weighted index was unchanged at 68.72.
The US consumer price index shrank 0.1% in July, in line with expectations, but eroding optimism the Federal Open Market Committee will raise interest rates when it announces its policy review on Thursday. It is expected to drag the greenback lower.
Traders are awaiting second-quarter gross domestic product data for New Zealand, which will likely show the country's economy expanded 0.6% in the period, as they assess whether the Reserve Bank will cut interest rates again.
"The risk is the Fed will disappoint tomorrow and you'll see a (US) dollar sell-off, given the CPI print overnight," ASB's NZ institutional FX sales head Tim Kelleher says. "The kiwi is on defensive ahead of GDP."
The kiwi fell to 88.36Ac from 88.83c yesterday, with Australia's currency outperforming in the trading session.
Mr Kelleher said the Australian dollar's gain was due "to the market's acceptance that (Malcolm) Turnbull is probably a better PM" than his predecessor, Tony Abbott, who he ousted this week.
The local currency increased to 4.0548 Chinese yuan from 4.0416 yuan yesterday, and gained to 76.71 yen from 76.27 yen. It slipped to 41.04 British pence from 41.33 pence yesterday, and edged up to 56.38 euro cents from 56.19c.
(BusinessDesk)
Paul McBeth
Thu, 17 Sep 2015
Thu, 17 Sep 2015
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Dollar gains as US inflation weighs on greenback
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