NZ dollar up as printers churn out US bucks

The New Zealand dollar cranked higher still as the greenback continued to weaken, propelled by the sheer weight of money being printed in the United States.

The kiwi was trading at US64.84c at 5pm yesterday from US64.17c at the same time on Thursday and looking set to end the week nearly 3c higher than last Friday’s finish in New York at U62.06c.

The day’s high at US64.94c was its highest level since February 5.

“It’s got a rocket up its backside,” said Mitchell McIntyre, a dealer at XE, adding that the Federal Reserve’s response to any market jitters or risk aversion had been to print yet more money, which meant a massive supply of US dollars.

Given the state of the US economy, “it’s fair to say they’re going to have to continue printing money to prop it up and keep it out of recession”, McIntyre said.

Also, traders were comparing how well economies had been coping with the pandemic and decided Australia and New Zealand seemed to be coming out of it better than their global counterparts, he said.

“We’ve almost become a safe haven and money needs a home. It makes no sense, but it is what it is.”

The NZ dollar was trading at A92.97c from A92.91c on Thursday. It was at 51.42 British pence from 51.16 pence, at 57.15 euro cents from 57.20 cents, at 70.78 yen from 70.01 yen, and at 4.6032 Chinese yuan from 4.5727 yuan.

The trade-weighted index was at 71.73 from 71.36.

The bid price on the two-year swap rate was 0.2325 per cent from 0.2100 per cent, while 10-year swaps were at 0.8500 per cent from 0.7775 per cent on Thursday.