NZ dollar up in Asia after US news

The New Zealand dollar was slightly higher in Asia after minutes from the latest US Federal Reserve policy meeting showed the central bank remained on track to raise interest rates several times this year but uncertainties remained.

The kiwi traded at US70.97c as at 5pm yesterday in Wellington versus US70.83c on Wednesday. The tradeweighted index was at 73.87, from 73.72 Wednesday.

Most participants “reiterated their support for continuing a gradual approach to raising the target range,” according to the minutes. They also showed policymakers expected President Trump’s tax cuts to boost consumer spending but remained uncertain over the impact of fiscal stimulus on raising price pressures.

The minutes initially “gave the (US) dollar a bit of a leg up and have kept the kiwi just below 71 cents,” said Mark Johnson, a senior dealer at OMF. The kiwi had traded at US71.10 USc just before the minutes. Johnson noted, however, trading was extremely thin, with many participants on holiday.

Looking ahead, investors will be watching for US payrolls data today, which is expected to show the world’s biggest economy added 188,000 jobs in December, down from 228,000 the previous month. Johnson felt it would be in line with expectations.

The kiwi dollar rose to 52.49 British pence from 52.09 on Wednesday and traded at A90.59c from A90.63c. It gained to 59.05 euro cents from 58.78. It rose to 79.94 yen from 79.57 and traded at 4.6177 yuan from 4.6071.

New Zealand’s two-year swap rate was unchanged at 2.19 per cent, the 10-year fell to 3.14 per cent.