Tiny lift for NZ dollar against greenback

The New Zealand dollar is headed for a 0.1 per cent weekly gain against the greenback and is largely treading water as markets eye the political turbulence between the US and North Korea.

The kiwi dollar traded at US69.20c at 5pm yesterday versus US69.29c at 8am and US69.25c late on Thursday. It was at US69.10c a week ago in New York. The tradeweighted index was at 72.59 from 72.68.

The kiwi benefited when the US dollar came under pressure after US President Donald Trump called off a planned summit with North Korea. It held those gains in Asian trading after North Korea said it was still open to talks.

ANZ Bank senior macro-strategist Phil Borkin said he expects it to stick to a tight range, in particular given the holiday weekend in the US. He likened the New Zealand dollar to a “beach ball underwater” and said it continued to have firm support around the US69.00c level. “It’s hard for it to push lower. There’s underlying demand,” he said.

“We are treading water and I don’t see that changing in the near term,” he said.

Looking ahead, Borkin said investors will be watching for next week’s financial stability report from the Reserve Bank, in particular as it is Adrian Orr’s first as bank governor. The Government’s announcement on whether it will try to eradicate or manage the Mycoplasma bovis cow disease will also be watched. The Government is expected to announce its decision on Monday.

The kiwi dollar traded at 51.77 British pence from 51.79 and 59.10 euro cents from 59.14 cents and was unchanged at A91.47c. It fell to 4.4197 yuan from 4.4255 yuan and was unchanged at 75.81 yen.

New Zealand’s two-year swap rate was unchanged at 2.18 per cent while 10-year swaps were unchanged at 3.14 per cent.