Kiwi well off 26- month high against US$

The New Zealand dollar was weaker after the greenback clawed back some of its losses and was headed towards a weekly gain of only 0.2 per cent despite touching a 26- month high on Thursday.

The kiwi fell to US74.75c at 5pm yesterday versus US74.88c at 8am, well off the 26- month high of US75.58c it touched in Asian trading on Thursday. The trade- weighted index declined to 78.83 from 79.21.

Tim Kelleher, ASB Bank head of institutional foreign exchange sales New Zealand, said the US dollar’s tumble in Asian trading “triggered an FX option on the euro and ever since then we have seen the US dollar bounce. I don’t know how big that structure was on the euro that got taken out, but it was obviously pretty big,” he said.

He also noted Asian equity markets have pulled back on the day and the Dow Jones futures are “quite strongly negative”. There “seems to be a bit of risk off today” which was weighing on the kiwi, he said. He added, however, there was no specific news driving things and it may also be some month- end profit taking.

The US dollar was also helped by data overnight that showed US durable goods orders rose more than expected in June, stoking optimism the world’s biggest economy didn’t falter in the second quarter.

He said the kiwi would likely find support around US74.00c to US74.25c and that a dearth of data means that any moves will be market driven.

The kiwi rose to A93.81c from A93.70c and traded at 63.93 euro cents from 64.22 cents. It fell to 82.98 yen from 83.77 yen, traded at 57.15 British pence from 57.40p and fell to 5.0432 yuan from 5.0759 yuan.

New Zealand’s two- year swap rate rose 1 basis point to 2.21 per cent while the 10- year swaps were unchanged at 3.27 per cent.