Kiwi dollar set for weekly fall against greenback

The New Zealand dollar is headed for a 1.2 per cent weekly fall against the greenback as equity markets continue to get battered by risk-averse investors.

The kiwi traded at US64.79c at 5pm yesterday from US65.13c at 8am and from US65.22c on Thursday. It was at US65.61c last Friday.

The trade-weighted index was at 71.37 from 71.60.

“It’s all US dollar-driven and equitydriven and risk-off driven,” said Tim Kelleher, head of institutional foreign exchange sales at ASB Bank.

Wall Street fared better overnight with the Dow Jones Industrial Average adding 401 points, or 1.6 per cent, after tumbling more than 600 points in the previous session.

The Nasdaq composite added 2.95 per cent but has shed almost two-thirds of its

2018 gains this month. Disappointing quarterly reports from Amazon.com and Alphabet after the close quickly dashed any enthusiasm.

“Those results were pretty ugly,” Kelleher said.

US stock futures turned negative on broad worries about corporate earnings and the outlook for the US economy.

That dented any appetite for commodity currencies like the kiwi and the Australian dollar, he said.

The New Zealand dollar traded at A92.12c from A92.07c on Thursday.

It traded at 56.99 euro cents from 57.15 cents on Thursday after the euro recovered slightly from an overnight fall when European Central Bank President Mario Draghi reiterated that the central bank will adopt a tightening policy despite worries around the eurozone’s growth outlook and political turmoil in Italy.

The kiwi was at 50.55 British pence from

50.59 pence and traded at 72.66 yen from

73.09 yen as investors sought havens. It decreased to 4.5079 Chinese yuan from

4.5278 yuan.

Investorswere waiting for third-quarter US gross domestic product numbers overnight to get a steer on the US economy.

New Zealand’s two-year swap rate fell

1 basis point to 1.99 per cent, while the

10-year swaps fell 3 basis points to 2.79 per cent.