NZ dollar range-bound as greenback strength continues into new year
The US dollar index remains near 14-year highs in thinly traded New Year markets.
The New Zealand dollar edged lower, remaining in recent ranges, as the greenback's ascendancy stays intact with the prospect of large US infrastructure spending and a strong economy continue to support the expectation for higher US interest rates.
The kiwi slipped to 69.21USc as at 8am in Wellington from 69.46USc yesterday and 69.33USc on December 30 in New York. The trade-weighted index dipped to 77.39 from 77.52 last week.
The US dollar index, a measure of the greenback against a basket of currencies, remained near 14-year highs in thinly traded markets in the opening to 2017 as the latest US data pointed to a healthy US economy.
With US president-elect Donald Trump promising tax reform and infrastructure spending, the US Federal Reserve has indicated a more aggressive track of rate hikes in the year ahead, lifting yields on bonds and stoking demand for the greenback.
"The US dollar is still in its uptrend, and as long as that remains so, the kiwi will be range-bound or lower," says Imre Speizer, senior markets strategist at Westpac Banking Corp in Auckland.
"The year ahead does look pretty good for the US dollar."
He says the kiwi has been stuck in a range between 68.60 and 69.90USc for the past three weeks.
Prices fell at the latest GlobalDairyTrade auction, with New Zealand's key export product – whole milk powder – falling 7.7% to $US3294 a tonne.
Fonterra boosted supply at the event, though the decline was bigger than what New Zealand's futures market priced in before trading closed for the New Year holiday.
The local currency fell to 95.79Ac from 96.23Ac yesterday and declined to ¥81.45 from ¥81.63.
The kiwi was little changed at 66.56 euro cents from 66.42c yesterday and almost unchanged at 56.55 UK pence from 56.56p. But it fell to 4.8167 Chinese yuan from 4.8377 yuan yesterday.
BusinessDesk
Paul McBeth
Wed, 04 Jan 2017
Wed, 04 Jan 2017
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NZ dollar range-bound as greenback strength continues into new year
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