NZ Dollar makes further gains overnight

Friday 13 January 2017 09:01 AM

NZ Dollar makes further gains overnight on continued Trump disappointment

By Rebecca Howard

Jan. 13 (BusinessDesk) - The New Zealand dollar made further gains overnight benefiting from a weaker US dollar as markets remained disappointed with the lack of detail from US president-elect Donald Trump’s press conference.

The kiwi rose as high as 71.43 US cents and was trading at 71.19 US cents at 8 am in Wellington from 70.77 cents yesterday. The trade-weighted index advanced to 78.25 from 77.90.

“This is the unwind of the Trump trade as the market was clearly very disappointed in Trump’s inability to enlighten markets about his economic policy and it raised questions about how things are going to pan out when he gets in office,” said Stuart Ive, senior dealer foreign exchange at OMF in Wellington in a note.

The US dollar had gained strongly since Trump was victorious in the November election, heightening expectations the Federal Reserve will raise interest rates more aggressively throughout 2017.

Ive said if the Kiwi manages to hold its current level through the New York close there is potential for further gains in the value of the local currency. However, a raft of data is due from the United States including retail sales, as well as a speech by US Federal Reserve Chair Janet Yellen, with Ive noting these had the potential to move the market around.

The kiwi rose to 58.58 British pence from 57.94 pence late Thursday. The local currency increased to 66.99 euro cents from 66.70 cents yesterday.

The kiwi edged up to 81.52 yen from 80.99 yen yesterday and climbed to 4.9043 Chinese yuan from 4.8896 yuan. It was slightly higher at 94.91 Australian cents from 94.79 cents.

(BusinessDesk)

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