NZ dollar gains 0.5% against greenback on week, treading water into weekend

The New Zealand dollar is heading into the end of the week up 0.5 percent against the US dollar, as the greenback struggled to gain any traction on ongoing jitters about the US, but stuck to a tight range on the day.

The kiwi was at 72.18 US cents as a 5pm in Wellington versus 72.27 cents as at 8am in Wellington and 72.01 cents late yesterday. It started the week at 71.84. The trade-weighted index rose to 78.40 from 78.26 at the beginning of the week, compared to 78.43 late yesterday.

The local currency benefited from a weaker US dollar this week after the market saw the latest minutes from the Federal Reserve as more dovish than anticipated. It got a further boost overnight after new US Treasury Secretary Steven Mnuchin indicated it would take time for fiscal policy reform to impact the US economy.

On the day, however, trading has been tepid. "The lack of data and any other influences mean it has ebbed and flowed" around resistance at 72.30 US cents, said Stuart Ive, senior foreign exchange dealer at OMF.

"Until we really know what's going on in the US these markets are somewhat subdued and nervous, partly because of the amount of time we are having to wait to see what the plans actually are," said Ive.

It continued to fare well against the Australian dollar, in particular after some weak data yesterday across the Tasman. It traded at 93.55 Australian cents from 93.65 cents late yesterday and from 93.53 early Monday.

Reserve Bank of Australia governor Philip Lowe's testimony to a parliamentary committee "didn't offer anything new to the mix," Ive said.

With little data of note later in the global trading day, he said markets will just "fade into the weekend without too much direction." Looking ahead, he said next week's Australian gross domestic product figures and manufacturing data out of China may cause some reaction. "If both of those pieces of data come out solid and to the upside we may see the Australian dollar coming back and the kiwi struggle," he said.

It slipped to 57.51 British pence from 57.82 pence and was at 68.19 euro cents from 68.14 cents. The kiwi was at 81.39 yen from 81.55 yen and rose to 4.9586 yuan from 4.9531 yuan.

New Zealand's two-year swaps rose 2 basis points to 2.3 percent while 10-year swaps rose 1 basis point to 3.46.

(BusinessDesk)