NZ dollar gains after Mnuchin says impact of US tax reform will take time
The kiwi rose to 72.27USc as at 8am in Wellington from 72.01USc late yesterday.
The New Zealand dollar rose after new US Treasury Secretary Steven Mnuchin indicated it would take time for fiscal policy reform to impact the US economy, frustrating traders betting on Trump administration stimulus and a stronger greenback.
The kiwi rose to 72.27USc as at 8am in Wellington from 72.01USc late yesterday. The trade-weighted index rose to 78.55 from 78.43.
The US dollar weakened after minutes of the last Federal Reserve policy meeting were deemed more dovish than the market was expecting, with varying opinions about inflation in the world's biggest economy, raising doubts that the Fed will hike interest rates as soon as next month. Mr Mnuchin told CNBC that he expected the impact of tax cuts showing up in late 2018, in contrast to President Donald Trump's talk of imminent reform.
"As US markets become more frustrated by the lack of detail over Mr Trump's policies, and come to the realisation that anything creative that might occur (if at all) will take some time to bite, expect the US dollar to be on the back foot," said David Crow, senior rates specialist at ANZ Bank New Zealand, in a note. "We see no obvious reason for the NZ dollar to go meaningfully lower given the growth outlook and the level of interest rates, which make the NZ dollar an expensive currency to 'short'."
With no local economic data scheduled today, traders will be looking across the Tasman for Reserve Bank of Australia governor Philip Lowe's testimony to a parliamentary committee.
The kiwi traded at 93.68Ac from 93.65Ac cents late yesterday. It slipped to 57.65 British pence from 57.82 pence and rose to 68.37 euro cents from 68.14 cents. The kiwi was little changed at ¥81.49 from ¥81.55 and rose to 4.9627 yuan from 4.9531 yuan.
(BusinessDesk)
Jonathan Underhill
Fri, 24 Feb 2017
Fri, 24 Feb 2017
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NZ dollar gains after Mnuchin says impact of US tax reform will take time
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