Short squeeze reverses kiwi’s greenback losses

THE New Zealand dollar reversed the week’s earlier declines against the greenback yesterday.

The kiwi was at US82.00C last night, and had traded at US82.17C.

HIFX senior currency strategist Dan Bell said there had been an upswing in the New Zealand dollar after it hit a low of US80.56C on Thursday.

Yesterday there had been general weakness in the US dollar, ‘‘and probably more a case of positioning and what we call in the market a short squeeze in the kiwi, where a lot of the positions that were put on yesterday have been reversed through the course of the last 24 hours,’’ Bell said.

‘‘Effectively there was not a lot to actively drive markets announced [yesterday]; it’s more positioning. Where the market has been short the New Zealand dollar through the course of the week, we’ve seen a reversal of that overnight.

‘‘There was not a lot of rhyme or reason apart from positioning really driving flows.’’

On the trade-weighted index against major trading partners’ currencies, the kiwi was at 73.30, up from 73.26.

On the crosses the kiwi was at A77.93c, up from A77.76c. It rose to ¥68.5 from ¥68.34 earlier.

It was at 0.6273, up 0.6259 euro cents.

It lifted to 52.25 pence from 52.15 pence previously.

Bell said the kiwi was expected to trade between US81.60C and US82.50C overnight.

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