Kiwi heads for 1.3% weekly gain as China, Europe outlook improves
Better-than-expected Chinese trade figures and an upbeat European Central Bank sap demand for the world's reserve currency.
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The New Zealand dollar is heading for a 1.3 percent weekly gain against the greenback after better-than-expected Chinese trade figures and an upbeat European Central Bank sapped demand for the world's reserve currency.
The kiwi fell to 84.25 US cents at 5pm in Wellington from 84.46 cents this morning, though it was up from 84 cents yesterday. The trade-weighted index was little changed at 75.61 from 75.67 yesterday, and may gain 1.7 percent this week.
The Dollar Index, a measure of the greenback against a basket of currencies, is heading for a 0.8 percent decline this week as investors look for riskier assets with bigger returns.
Strong Chinese export figures yesterday stoked confidence in the world's second-biggest economy will not slow down as much as earlier feared, while ECB president Mario Draghi scotched talk of interest rate cuts and was more optimistic about the eurozone.
"Until the Federal Reserve starts removing stimulus, the US dollar is going to remain under pressure," says Dan Bell, currency strategist at HiFX in Auckland. "We've got a short-term bias for the kiwi to the top side."
The kiwi climbed as high as 75.39 yen after Japan's Prime Minister Sinzo Abe unveiled a 10.3 trillion yen spending package to drive growth and stoke employment. New Zealand's currency rose to 74.95 yen 73.96 yen yesterday and is heading for a 2.2 percent weekly gain.
Chinese inflation accelerated faster than expected to an annual pace of 2.5 percent in December, according to official figures today. That took some of the heat out of investors' risk sentiment.
The kiwi fell to 5.2356 yuan from 5.2547 yuan yesterday. It dropped to 63.56 euro cents from 64.37 cents yesterday, and declined to 52.18 British pence from 52.42 pence. It was little changed at 79.62 Australian cents from 79.65 cents yesterday.
(BusinessDesk)
Paul McBeth
Wed, 11 Jul 2018
Wed, 11 Jul 2018
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Kiwi heads for 1.3% weekly gain as China, Europe outlook improves
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