Kiwi solid as US inflation shrugged off

The New Zealand dollar was little changed against the US dollar as markets shrugged off the strongerthan-expected inflation data in the US and a recovery in risk sentiment weighed on the greenback.

The kiwi traded at US73.71c at 5pm yesterday versus US73.31c late on Wednesday.

The US CPI data showed the core measure excluding food and energy rose 0.3 per cent in the month and 1.8 per cent in the year, beating forecasts of 0.2 per cent and 1.7 per cent respectively. However, some of the shine was taken out when weak US retail sales weighed on expectations around economic growth.

Robert Rennie, chief currency strategist at Westpac Banking Corp, also said investors may be taking a closer look at the fiscal situation as they look at the tax package in the US, the spending increases attached to the funding bill as well as President Donald Trump’s budget and infrastructure package. “There is a sense out there that the US fiscal position is on the verge of careering out of control,” which could be undermining the dollar, he said.

The kiwi was also steady against the Aussie after jobs data across the Tasman added to the view there is little or no wage inflation. It traded at A92.90c from A92.93c.

The kiwi traded at 52.58 British pence from 52.66p. It traded steady at 59.16 euro cents and rose to 78.55 yen from ¥78.34.