New Zealand dollar heading for weekly gain

The kiwi dollar is headed for a 1.3 per cent weekly gain against the US dollar as investors wind back their bets that it has further to fall.

The kiwi traded at US68.23c at 5pm yesterday from US68.29c at 8am and US67.99c late on Thursday. It traded at US67.37c last Friday. The trade-weighted index was at

74.52 from 74.60 from on Thursday. Solid economic data, including yesterday’s lift in the October manufacturing performance index, has led investors to pare back on so-called “short” kiwi dollar positions, which had been running at record levels for the past several months.

When positioning is short it means traders are selling the kiwi in the expectation it will fall and can be bought back at a lower price.

Mark Johnson, a private client manager at OMF, said today’s US Commodity Futures Trading Commission data will provide a steer on whether those short positions are continuing to unwind.

“The way the kiwi has held up over this past week would imply those short positions have been pared back,” he said.

The kiwi also remained firm against the British pound on Brexit uncertainties as several ministers resigned saying they couldn’t support the plan.

It traded at 53.33 British pence from 52.26 pence on Thursday. It was at 60.17 euro cents from 59.99 euro cents.

Johnson said, however, the main focus is on the upcoming G20 meeting later this month, where US President Donald Trump and Chinese leader Xi Jinping are due to meet.

The kiwi was at 4.7352 Chinese yuan from

4.6913 yuan and at 77.35 yen from 76.97 yen. New Zealand’s two-year swap rate was unchanged at 2.17 per cent; the 10-year swaps were down three basis points at 3.01 per cent.