NZ dollar rises to two-week high as weaker US growth weighs on greenback
The kiwi traded at 71.96USc as at 8am in Wellington. With special feature audio.
The New Zealand dollar rose to a two-week high after figures showed the US economy grew less than expected in the second quarter while some economists are becoming more bullish about the domestic economy.
The kiwi traded at 71.96USc as at 8am in Wellington, from 72.13USc in late New York trading on Friday and up from 70.88USc in Asia at the end of last week. The trade-weighted index was at 76.43, up from 75.74 in Wellington on Friday and well above the 71.6 average the Reserve Bank has projected for the third quarter.
US gross domestic product rose at an annualised rate of 1.2% in the second quarter, undershooting the 2.5% forecast in a Bloomberg survey and keeping intact expectations the Federal Reserve won't be in a hurry to raise interest rates this year. By contrast, economists at UBS say the New Zealand economy probably continued to grow at an annualised pace of 3.3% in the second quarter and they lifted their 2016 growth forecast to 2.7% from 2.3% last Friday.
"New Zealand's strong relative economic performance and the lack of support for US monetary policy tightening suggest that the 'stronger-for-longer' New Zealand dollar theme is likely to prevail, with New Zealand rate cuts doing little to prevent that outcome," Bank of New Zealand currency strategist Jason Wong said.
Fonterra Cooperative Group announces its milk payout forecast today and traders will be looking for any sign that there's a pick-up expected for dairy prices.
The kiwi traded at ¥73.51 from a three-week low of ¥73.10 in Wellington on Friday.
The local currency traded at 94.66Ac from 94.75Ac in New York on Friday and fell to 4.7727 yuan from 4.7840 yuan. It slipped to 64.33 euro cents from 64.44 cents on Friday in New York and decreased to 54.31 British pence from 54.45 pence.
(BusinessDesk)
Jonathan Underhill
Mon, 01 Aug 2016
Mon, 01 Aug 2016
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NZ dollar rises to two-week high as weaker US growth weighs on greenback
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