Kiwi tests 66USc cents as traders pull back bets on US dollar
The kiwi touched 65.92USc.
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The New Zealand dollar rose, hovering just shy of 66USc, as investors pulled back their bets for the greenback's advance after minutes to the last Federal Reserve policy meeting reiterated that a US interest rate hike is likely next month.
The kiwi touched 65.92USc, and was trading at 65.62USc at 8am in Wellington, from 65.31USc at 5pm yesterday. The trade-weighted index gained to 71.39 from 71.15 yesterday.
Speculators favouring a rise in the US dollar pushed bets to their highest levels since mid-August, Reuters reported ahead of the release of the Fed minutes yesterday morning New Zealand time. Analysts say traders have pulled back those so-called 'long' positions after the Fed minutes failed to be more explicit on the likelihood of a December rate hike.
"After the drift higher over the past week, the US dollar was ripe for profit-taking on anything short of compelling hawkishness," Bank of New Zealand currency strategist Raiko Shareef said in a note. "The extent of the sell-off simply highlights the weakness of some of the US dollar long positions investors had entered earlier in the week.
"We still prefer being strategically long on the US dollar heading into December."
The kiwi has strong resistance at 66USc, and a breakthrough at that level would likely see a quick rally up to 67USc, Shareef said.
Later today, all eyes will be on speeches by US Federal Reserve vice-chairman Stanley Fischer, New York Fed president William Dudley and San Francisco Fed president John Williams for further signals on US interest rate hikes.
In New Zealand, credit card data for October is released at 3pm.
The New Zealand dollar was little changed at 91.16Ac from 91.19Ac yesterday ahead of a speech by Reserve Bank of Australia head of economic analysis Alexandra Heath at a resources and energy workshop hosted by the Department of Industry, Innovation and Science in Canberra.
The kiwi gained to 80.59 yen from 80.45 yen yesterday after the Bank of Japan kept interest rates unchanged as expected.
The local currency advanced to 42.90 British pence from 42.73 pence yesterday, increased to 61.16 euro cents from 61.01 cents and rose to 4.1882 yuan from 4.1655 yuan.
(BusinessDesk)
Tina Morrison
Fri, 20 Nov 2015
Fri, 20 Nov 2015
© All content copyright NBR. Do not reproduce in any form without permission, even if you have a paid subscription.
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Kiwi tests 66USc cents as traders pull back bets on US dollar
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