Kiwi gains as fiscal cliff optimism stoked, stocks rise
Wall Street rallies after US House speaker says he is willing to put revenues up for negotiation.
The New Zealand dollar gained after comments by US House of Representatives Speaker and senior Republican John Boehner stoked optimism that policymakers will set aside their differences and bypass the fiscal cliff of $US607 billion, stoking investor confidence and pushing stocks higher.
The kiwi rose to 82.34 US cents at 8.30am in Wellington from 82.14 cents yesterday. The trade-weighted index advanced to 73.64 from 73.46.
Stocks on Wall Street rallied after Mr Boehner said he was willing to put revenues up for negotiation if it was accompanied by spending cuts and that he was optimistic lawmakers could "avert this crisis sooner rather than later".
Investors have been fretting that the world's biggest economy will be stuck in a stalemate similar to this year's debt ceiling debate that saw Standard & Poor's cut its triple-A credit rating and ultimately slip back into recession. The Standard & Poor's 500 Index gained 0.4%.
Markets rallied after "some positive words from Boehner on trying to solve the fiscal cliff", says Tim Kelleher, head of institutional FX aales NZ at ASB Institutional in Auckland. "The kiwi should squeeze up on the day."
The currency may trade between 82.25 US cents and 82.75 cents, with a fall in commodity prices holding back gains, he says.
Traders will be looking for Australian capital expenditure figures today, which are expected to show the world's 12th biggest economy might be starting to slow down after the resources boom gave it a buffer during the global financial crisis.
Australian business investment rose 2% in the three months ended September 30 after growing 3.4% in the previous quarter, according to a Bloomberg survey of economists. The kiwi was little changed at 78.60 Australian cents from 78.56 cents yesterday.
It rose to 67.38 yen from 67.22 yen yesterday and increased to 51.43 British pence from 51.30 pence. It was at 63.68 euro cents from 63.50 cents yesterday.
(BusinessDesk)
Paul McBeth
Wed, 11 Jul 2018
Wed, 11 Jul 2018
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Kiwi gains as fiscal cliff optimism stoked, stocks rise
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