NZ dollar slips from overnight highs to be little changed

The New Zealand dollar fell from its overnight highs, to be little changed after stronger-than-expected US consumer confidence and the first US presidential debate that some commentators gave to Democratic candidate Hillary Clinton.

The kiwi traded at 72.96USc, having reached as high as 73.25USc overnight, from 72.90USc late yesterday. The trade-weighted index edged up to 77.37 from 77.26.

The US presidential debate dominated financial markets yesterday and was followed by figures showing US consumer confidence printed at 104.1 in September against expectations of a gloomy 98.8. That helped nudge up the US dollar after risk-sensitive currencies had been boosted yesterday by perceptions Mrs Clinton outshone rival Donald Trump in the debate. The peso of Mexico, which Trump has threatened to shut out behind a border wall, also gained from the debate.

"The NZ dollar has continued its recovery since last week's fall, spiking as high as 0.7325 against the US dollar before better-than-expected US consumer confidence data bolstered the US dollar," analysts at HiFX said. "Markets have traded tight ranges as traders digest yesterday's first of three eagerly awaited presidential debates, with most pundits giving Mrs Clinton the edge."

"For a second consecutive month consumer confidence in the US increased, this time surprising the market by spiking to a post-recession high," they said.

The kiwi has recovered after selling off in the wake of the Reserve Bank's reiteration last week that a further interest rate cut is on the cards. New Zealand's relatively strong economy and high interest rates have supported demand for the kiwi dollar, despite the fact the Reserve Bank plans to cut the official cash rate later this year.

The kiwi traded little changed at 95.16Ac from 95.10Ac ahead of Reserve Bank of Australia assistant governor Malcolm Edey's speech at the Australian Financial Review retail summit in Melbourne today. The local currency rose to 4.8651 yuan from 4.8627 yuan and slipped to ¥73.22 from ¥73.45. It increased to 64.99 euro cents from 64.84 cents and edged down to 56.06 British pence from 56.14 pence.

(BusinessDesk)

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