Kiwi continues to rise as US dollar slumps

The New Zealand dollar resumed its upward march after data showed the US economy contracted an annualised 32.9 per cent in the June quarter and the US dollar fell to its lowest level since May 2018 against a basket of major currencies.

The kiwi was trading at US67.05c at 5pm yesterday from US66.44c at the same time on Thursday and well up on last week’s close in New York at US65.79c. The trade-weighted index was at 72.57 from 72.23.

“It’s just a continuation of a weak US dollar — all the major currencies gained overnight and as Asia opened the US dollar had another down leg,” said Pat Gilligan, a director at Forex. The US dollar index has lost 5 per cent in the past month.

“It looks like there’s more coming. Fed policies and stimulus measures are weakening the US dollar and the momentum is gaining,” Gilligan said.

On top of the weak GDP data, weekly US unemployment claims rose again in a further sign the economy is stalling.

US lawmakers also appear at an impasse over another stimulus bill even as reported Covid-19 infections remain high and deaths climb.

A key sticking point is whether to continue paying the unemployed a US$600 a week bonus on top of the benefits they receive and which have just run out.

The NZ dollar was trading at A92.83c from A92.62c at 5pm Thursday, at 69.93 yen from ¥69.81, at 56.36 euro cents from €56.44c,

51.07 British pence from 51.20 pence and

4.6852 Chinese yuan from 4.6490 yuan. The bid-price on the two-year swap rate was at 0.1400 per cent from 0.1830 per cent on Thursday while the 10-year swap was at

0.6100 per cent from 0.6600 per cent.