Kiwi higher as US dollar hit

The New Zealand dollar was higher on the day and up 2.3 per cent for the week as the greenback remained out of favour due to internal political issues, jitters around North Korea and several hurricanes.

The kiwi was trading at US73.21c at 5pm yesterday versus US72.33c at 8am and from US72.02c on Thursday. It was trading at US71.54c in New York last Friday. The trade weighted index climbed to 75.64 from 75.04.

The greenback has come under fire on jitters that Pyongyang could launch another missile test today, during a North Korean national holiday, and as Hurricane Irma comes hard on the heels of Hurricane Harvey, with Irma due to hit South Florida sometime this weekend. The US dollar index, a measure of the greenback against a basket of currencies, was down 0.6 per cent to 91.1, having hit its lowest level since January 2015.

“The US dollar has continued to suffer aggressively as Asia and global markets have just hit the US dollar through the week,” said Robert Rennie, chief currency strategist at Westpac Banking Corp in Sydney. “It has been relentless.”

Rennie warned, however, that a story began to circulate late in New York, driven by President Donald Trump himself, about eliminating the debt ceiling, or the statutory cap on the US Treasury Department’s authority to borrow.

“I am not sure that Asian markets are really trading on that story,” he said. When Europe and the US begin trading and digest that news, “we might see a bit of a reversal”, he said.

While the kiwi has gained from the slide in the greenback, Rennie said political uncertainty surrounding the September 23 election, which might see a change in Government, was holding it back. The kiwi was trading at 60.60c versus 60.39c late on Thursday. It was at A90.25c from A90.12c late on Thursday and at 55.73p versus 55.20p.