NZ dollar gains on safe-haven buying as US stocks fall, RBA report eyed
Jan. 8 (BusinessDesk) – The New Zealand dollar rose against the greenback, even as US stocks fell, in what may be a run of safe-haven buying that’s also lifted the Australian dollar.
The kiwi rose to 83.55 US cents from 82.94 cents at 5pm in Wellington yesterday. The trade-weighted index climbed to 75.19 from 74.82.
Stocks on Wall Street fell ahead of the US earnings season, pushing the Standard & Poor’s 500 Index down 0.5 percent, though that wasn’t enough to dent the kiwi amid general US dollar weakness. New Zealand’s tepid economic growth and record low interest rates are still attractive relative to other economies, with demand from China seen underpinning growth.
“The kiwi has completely disconnected from equity markets,” said Tim Kelleher, head of institutional FX sales at ASB Institutional. “All we can put it down to is safe-haven buying.”
The kiwi may trade in a range of 83.25 US cents to 83.75 cents today, he said.
The New Zealand dollar rose to 79.66 Australian cents from 79.14 cents as traders digested a report in the Australian Financial Review that said the Reserve Bank of Australia’s ability to weaken its currency through cutting interest rates has been limited by the US Federal Reserve’s policy of printing money.
The Australian dollar rose to US$1.0491 from US$1.0472 late yesterday.
The local currency rose to 51.90 British pence from 51.68 pence and gained to 63.72 euro cents from 63.54 cents. It gained to 73.25 yen from 73.07 yen.