NZ dollar ends lower after Gulf tensions ease

The New Zealand dollar headed for a 0.9 per cent fall over the week as the US dollar gained on the back of easing tensions between the US and Iran.

Tensions rose when US President Donald Trump ordered a fatal drone strike on Iranian General Qassem Soleimani last week but investors were cheered when the situation didn’t escalate beyond Iran’s missile attack on two US military bases in neighbouring Iraq.

The kiwi was trading at US66.13c at 5pm yesterday versus US66.48c at Thursday’s close and US66.63c last Friday in New York. The trade-weighted index was at 72.55 from

72.91 on Thursday.

“A lot of it is big dollar (US dollar) related. I think kiwi is just catching up,” said Tim Kelleher, head of institutional foreign exchange sales at Commonwealth Bank of Australia.

The kiwi was also slipping against the Australian dollar, trading at A96.25c from A96.70c on Thursday.

“The market got quite carried away by the move in the kiwi against the Aussie after the bushfires and we are just seeing a bit of profit-taking on that,” said Kelleher.

He also noted that some domestic data had also been “quite poor”, pointing to the fact that new car registrations in 2019 posted their first calendar-year decline in a decade.

The New Zealand dollar was trading at

72.43 yen from ¥72.58 at Thursday’s close. It was at 50.60 British pence from 50.72p late Thursday, at 59.53 euro cents from €59.81c, and at 4.5846 Chinese yuan from

4.6057.

The two-year swap rate rose to a bid price of 1.1713 per cent from 1.1629, while 10-year swaps were at 1.6350 per cent from 1.6325.