NZ dollar heads for 0.4% weekly gain in lacklustre trading
By Paul McBeth
Aug. 15 (BusinessDesk) - The New Zealand dollar is heading for a 0.4 percent weekly gain in what's been lacklustre trading, with little hard economic data driving direction.
The kiwi rose to 84.88 US cents at 5pm in Wellington from 84.56 cents at the New York close last week. It traded at 84.91 cents at 8am, up from 84.70 cents yesterday. The trade-weighted index rose to 79.62 from 79.27 last week, and was up from 79.50 yesterday.
A BusinessDesk survey of 10 traders and strategists predicted the kiwi would trade between 82.30 US cents and 86 cents this week. Five picked the kiwi would remain largely unchanged this week, while three expected it would gain and two tipped a decline.
Geopolitical tensions in Iraq and Ukraine kept investors nervous through the start of the week, weighing on investor sentiment and keeping risk-sensitive assets, such as the kiwi, under pressure. That eased after better-than-expected New Zealand retail sales and upbeat Australian business confidence stoked investor demand for the more attractive yields on offer from the trans-Tasman economies.
"There's some offshore demand for our bonds, equities have calmed down and rallied back," said Tim Kelleher, head of institutional FX sales NZ at ASB Institutional. "There's been a bit of strength in the kiwi and Aussie in the last couple days with some yield-hunting."
ASB's Kelleher said the local currency could squeeze higher until Tuesday next week when Fonterra Cooperative Group's latest online dairy auction takes place. Falling dairy prices have eroded investors' confidence in the strength of New Zealand's economy, and have pushed the kiwi down from near post-float highs in mid-July.
The New Zealand dollar was little changed at 90.99 Australian cents from 91.07 cents yesterday, and traded at 86.99 yen from 86.86 yen. It increased to 63.50 euro cents from 63.37 cents yesterday, and edged up to 50.84 British pence from 50.77 pence.