Kiwi falls on hope a stronger US economy may ease monetary supply
The New Zealand dollar dips as the USD strengthens above 100 yen to a four-year high on speculation improvements may bring forward an end to QE.
The New Zealand dollar fell as the greenback strengthened above 100 yen to a four-year high on speculation an improvement in the US economy may bring forward an end to quantitative easing.
The kiwi fell to 83.90 US cents from 84.56 cents at 5pm yesterday, having dropped as low as 83.51. The trade weighted index fell to 77.86 from 77.97.
The US dollar rose against other major currencies including the yen, Aussie and kiwi after an upbeat jobless report suggested a stabilising labour market in the world's largest economy. That led to speculation the Federal Reserve may call a halt to its policy of increasing monetary supply.
The surge in the US dollar "caused other currencies to fall", says Imre Speizer, market strategist at Westpac Banking Corp. The kiwi "is looking vulnerable over the next day or so".
It rose against its Australian counterpart to 83.15 Australian cents from 82.60 cents yesterday.
Mr Speizer says he expects the kiwi to go "well above" 83.50 Australian cents over the longer term as rising interest rates in New Zealand make the nation's assets more attractive than Australia, where rates are falling.
Still, he expects a pullback in the short term as traders who have bet the New Zealand dollar would rise and the Australian currency would fall take profits.
The kiwi rose to 84.37 yen from 83.45 yen yesterday and gained to 64.32 euro from 64.23 euro. It dropped to 54.29 British pence from 54.40 pence.
(BusinessDesk)
Tina Morrison
Wed, 11 Jul 2018
Wed, 11 Jul 2018
© All content copyright NBR. Do not reproduce in any form without permission, even if you have a paid subscription.
Kiwi falls on hope a stronger US economy may ease monetary supply
29275