NZ dollar falls to new six-month low as Trump's confirmation underpins greenback
The kiwi's "been weak for the last two or three days."
The New Zealand dollar hit fresh six-month lows today in the face of a stronger US dollar as Donald Trump was confirmed as the next US president.
The kiwi declined to 69.30 US cents as at 5pm in Wellington from 69.79 cents late Monday. It touched a low of 69.13 earlier in the session. The trade-weighted index fell to 77.21 77.58 yesterday.
The main driver across the region continued to be the stronger greenback, as the US electoral college confirmed Donald Trump as the nation's 45th president. Trump's promises of tax cuts and increased spending have been shoring up the greenback along with the Federal plans to raise interest rates faster than the market had expected.
The kiwi's "been weak for the last two or three days. It looks like it got sold on momentum once it broke through the November low of 0.6975 (US cents)," with the move exacerbated by thin pre-Christmas trading, said ASB head of FX institutional sales New Zealand Tim Kelleher.
Looking ahead, Kelleher said if it breaks below 68.50 US cents "we will be at 65 pretty quickly."
He said the overnight GlobalDairyTrade auction is unlikely to have much impact as the market is already expecting prices to dip, partly on increased volumes on offer.
The kiwi held up fairly well against the Australian dollar on the day, which was harder hit by a fall in other Asian currencies such as the Malaysian Ringgit, he said.
The local currency traded at 95.45 Australian cents from 95.5 cents late Monday. It slipped to 4.8166 yuan from 4.8182 yuan and was at 81.25 yen from 81.24 yen. It traded at 66.54 euro cents from 66.66 cents and was at 55.85 British pence versus 55.91 pence.
New Zealand's two-year swap rate was unchanged at 2.38 percent, and 10-year swaps were down two basis points at 3.55 percent.
(BusinessDesk)
Rebecca Howard
Tue, 20 Dec 2016
Tue, 20 Dec 2016
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NZ dollar falls to new six-month low as Trump's confirmation underpins greenback
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