Death of Iranian General in US strike hits dollar

The New Zealand dollar weakened after a US airstrike near Baghdad airport killed a senior commander in Iran’s Revolutionary Guard, boosting oil prices and prompting a flight to the safety of gold and the greenback.

General Qassem Soleimani, head of the Revolutionary Guards’ elite Quds Force, was killed shortly after landing at Baghdad airport, Al Jazeera reported. The strike, a response to attacks on the US embassy in Baghdad, also killed Iraqi militia leader Abu Mahdi al-Muhandis and several others, the Popular Mobilisation Forces told Reuters. The PMF is an Iraqi militia backed by Iran.

The kiwi was trading at US66.75c at 5pm in Wellington, from US66.95c before headlines on the attack early afternoon New Zealand time. The trade-weighted index was at 73.03 from 73.48 late Thursday.

“It’s just that classic flight to safety,” said Mike Shirley, senior dealer with Kiwibank.

“The yen is getting bought up like there’s no tomorrow.”

The kiwi was buying 72.21 yen from 72.54 before the strike and 73.08 late Thursday.

The New Zealand dollar gained almost 5 per cent last month and briefly traded above US67.50c overnight Tuesday before easing after the signing of an interim US-China trade deal was confirmed for January 15.

Shirley noted the kiwi had already “lost a bit of altitude” over the New Year break as the US dollar gained on expanding manufacturing activity and a dip in unemployment.

The New Zealand dollar was at 95.71 Australian cents from A95.89c the previous day. It was at 50.83 British pence from 50.87p, at

59.74 euro cents from €59.93c and at 4.6509 Chinese yuan from 4.6827. The two-year swap rate fell to a bid price of 1.2144 per cent from 1.2250, while 10-year swaps fell to

1.7100 per cent from 1.7425.