Dollar set to end quarter up 1.6pc

The New Zealand dollar is heading for a 1.6 per cent quarterly gain against the US dollar after a whippy three months that saw it around 5 per cent higher at one stage as the greenback remained out of favour.

The New Zealand dollar traded at 71.99 US cents as at 5pm on Thursday, the last day of trading before Easter, versus 72.07 US cents as at 8am on same day and 72.69 cents late Wednesday. It began the quarter around

70.80 US cents. The trade-weighted index fell to 74.04 as at 5pm from 74.50.

The kiwi has come under some pressure in Asia after data showed the US economy didn’t slow as much as expected in the final three months of 2017.

Over the quarter, however, the kiwi “has outperformed. It’s like the Swiss Franc of the South Pacific.

“You see safe-haven buying of Swiss Francs and then the kiwi looks good,” said Tim Kelleher, head of institutional foreign exchange sales at ASB Bank.

The kiwi also remained firm against the Australian dollar, trading at 93.92 Australian cents from 94.40 cents and up 3.4 per cent in the quarter.

Looking ahead, however, Kelleher said the market was “very delicately poised” heading into the long Easter weekend. He was expecting reasonably sized portfolio reallocations of currencies overnight because equity markets have moved so much lower, something that is likely to be negative for both the kiwi and the Aussie, he said.

The New Zealand dollar traded at 58.37 euro cents from 58.54 cents and fell to

4.5289 yuan from 4.5674 yuan.

It traded at 76.67 yen from 76.70 yen and was little changed at 51.10 British pence from

51.20 pence.

New Zealand’s two-year swap rate rose 1 basis point to 2.21 and the 10-year swap rate fell one basis point to 3.04 per cent.