Trump’s tweet dents kiwi dollar

The New Zealand dollar eased slightly in Asian trading in holidaythin markets after US President Donald Trump tweeted threats to North Korea.

The kiwi traded at US70.83c as at 5pm in Wellington versus US71.03c late Tuesday. The kiwi has gained in recent sessions as the prices of raw materials have lifted commoditylinked currencies. The tradeweighted index was at 73.72 from 73.88 on Tuesday.

Mike Shirley, senior FX dealer for Kiwibank, said the New Zealand dollar may have “waned slightly on risk aversion/flight to safety following Trump’s twitter comments regarding North Korea”. He noted there was a similar theme in the Japanese yen, which strengthened against the US dollar as a safe-haven play. The “magnitude of the moves, however, was far less than we’ve seen in the past — in part because the market has simply become accustomed to these exchanges,” he said.

Shirley noted, however, that all moves are very marginal as many people are still on holiday. He said the US dollar may also have benefited as the new trading year gets under way and investors retake positions they may have unwound at the end of last year.

Looking ahead, he said the main event this week will be the US nonfarm payrolls overnight Friday. The kiwi dollar fell to 52.09 British pence from 52.60p on Tuesday. It traded at A90.63c from A91c and declined to 58.78 euro cents from

59.14c. It fell to 79.57 yen from ¥80.02 and dropped to 4.6071 yuan from 4.6221 yuan. New Zealand’s 10-year swap rate rose 3 basis points to 3.16 per cent.