Dollar climbs as traders eye US support efforts

The New Zealand dollar rebounded in line with US equities markets as traders focus on economic support measures and economies reopening rather than the worsening coronavirus pandemic in the world’s largest economy.

The kiwi was trading at US64.42c at 5pm yesterday from US64.17c at the same time on Thursday and from US64.05c a week ago in New York. The trade-weighted index was at

71.36 from 71.15.

“The reality is people are still torn between the free-money future and the reality of the virus,” said Mike Houlahan, a dealer at XE, referring to the economic support measures in the US.

“There’s talk they’re going to extend the unemployment subsidy to the end of the year,” Houlahan said. At present, those receiving unemployment benefits in the US are being paid an extra US$600 a week for up to six months.

Data released yesterday showed another

1.48 million people in the US filed for unemployment insurance, the 14th consecutive week in which more than a million people have filed claims, bringing the total over those 14 weeks to about 47 million.

The S&P 500 index, the benchmark US stock index, rose 1.1 per cent yesterday. Locally, the S&P/NZX 50 index closed barely changed.

The kiwi dollar was trading at A93.47c from A93.48c on Thursday, at 51.81 British pence from 51.69 pence, at 57.38 euro cents from 57.04 cents, at 68.99 yen from 68.76 yen and at 4.5583 Chinese yuan from 4.5420 yuan.

The bid price on the two-year swap was at

0.1950 per cent from 0.1875 per cent, while the 10-year swap was at 0.7525 per cent from

0.7225 per cent on Thursday.