Kiwi ekes out modest gain on greenback

The New Zealand dollar eked out a 0.2 per cent gain against the US dollar over the week, largely on the back of a softer greenback as markets remain jittery about US President Donald Trump’s policies.

The kiwi was trading at US72.04c at 5pm yesterday versus US72.25c on Thursday and from US71.89c on Monday. The tradeweighted index was at 78.30 from 78.55 on Thursday and 78.37 on Monday.

Ross Weston, FX trader at Kiwibank, said yesterday was largely uneventful although he was surprised the kiwi didn’t “lurch lower” on domestic retail sales data, which was weaker than expected. Statistics New Zealand said yesterday the volume of retail sales increased a seasonally adjusted 0.8 per cent in the three months ended December 31, from a 0.9 per cent rise in the September quarter.

Economists had been expecting a 1.0 per cent increase, according to ASB senior economist Jane Turner, although the data was in line with ASB’s forecasts.

A dip in manufacturing activity in January also failed to dent the kiwi.

Weston said the kiwi has a “fairly constant bid in the market at the moment. The US dollar is struggling to push higher and that seems to be supporting the kiwi.”

Weston said the greenback is likely to remain under pressure “until we get some confirmation about what Trump is or isn’t going to do and what effect that has on the fiscal side of things”.

The kiwi fell to 81.61 yen from 82.22 yen on Thursday. The local currency declined to 67.47 euro cents from 68.08 cents on Thursday and to 57.61 British pence from 57.96 pence.

The kiwi increased slightly to 4.9463 Chinese yuan from 4.9443 yuan yesterday and dipped to A93.48c from A93.66c.

New Zealand’s t wo- year swaps fell five basis points to 2.32 per cent while 10- year swaps fell two basis points to 3.51 per cent.