Kiwi edges up as greenback struggles

The New Zealand dollar is heading into the end of the week up 0.5 per cent against the US dollar, as the greenback struggled to gain any traction on ongoing jitters about the US, but stuck to a tight range on the day.

The kiwi was at US72.18c as of 5pm yesterday versus US72.27c at 8am and US72.01c late on Thursday.

It started the week at US71.84c. The tradeweighted index rose to 78.40 from 78.26 at the beginning of the week, compared to 78.43 late on Thursday.

The local currency benefited from a weaker US dollar this week after the market saw the latest minutes from the Federal Reserve as more dovish than anticipated.

It got a further boost overnight after new US Treasury Secretary Steven Mnuchin indicated it would take time for fiscal policy reform to impact the US economy. On the day, however, trading was tepid. “The lack of data and any other influences mean it has ebbed and flowed” around resistance at US72.30c, said Stuart Ive, senior foreign exchange dealer at OMF.

“Until we really know what’s going on in the US, these markets are somewhat subdued and nervous, partly because of the amount of time we are having to wait to see what the plans actually are,” Ive said.

The kiwi continued to fare well against the Australian dollar, in particular after some weak data on Thursday across the Tasman. It traded at A93.55c from A93.65c late on Thursday and from A93.53c early Monday.

Looking ahead, Ive said next week’s Australian gross domestic product figures and manufacturing data out of China may cause some reaction. “If both of those pieces of data come out solid and to the upside we may see the Australian dollar coming back and the kiwi struggle,” he said.

The kiwi slipped to 57.51 British pence from 57.82p and was at 68.19c from 68.14c. The NZ dollar was at ¥ 81.39 from ¥ 81.55 and rose to 4.9586 yuan from 4.9531 yuan.

New Zealand’s two- year swaps rose 2 basis points to 2.3 per cent while 10- year swaps rose 1 basis point to 3.46 per cent.