Dollar falls from four-month high

The New Zealand dollar fell from the four-month high it reached at the end of last week amid speculation the market may be underestimating the prospects for Federal Reserve rate hikes this year that should support the greenback. The kiwi traded at US73.98c at 5pm in Wellington yesterday, from US73.88c in New York on Friday and down from as high as US74.38c at the end of last week. With public holidays in both China and the United States, trading yesterday was somewhat subdued, said Martin Rudings, senior dealer at OMF. Local economic data this week may not be enough to drive the kiwi, including business prices and quarterly retail sales, and prices at the GlobalDairyTrade auction are expected to be flat. That means the currency will probably take its lead from the US dollar and perceptions of US monetary policy. “There’s some thought there might be a little bit more of a US dollar rally,” Rudings said. “That might pull the Australian and New Zealand dollars down. The kiwi may be consolidating its gains.” He expects the kiwi to trade in a range of US73.50c to 74.40c in coming days. The kiwi didn’t move much after the BNZ-BusinessNZ performance of services index fell 0.2 points to a seasonally adjusted 55.8 last month. The PSI followed the PMI survey on Friday, which showed manufacturing activity rose 4.5 points to a seasonally adjusted 55.6 in January. The New Zealand dollar edged up to A93.27c from 93.18c in New York on Friday. It traded at 52.67 British pence from 52.57p. It was at €59.55c from

59.42c and rose to 4.6925 Chinese yuan from 4.6779 yuan. Against the Japanese currency, the kiwi edged up to ¥78.65 from ¥78.39. — AAP