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NZ dollar gains vs Aussie after weak 4Q business investment
Thursday 23 February 2017 05:12 PM
NZ dollar gains vs Aussie after weak 4Q business investment data in Australia
By Rebecca Howard
Feb. 23 (BusinessDesk) - The New Zealand dollar rose against the Australian dollar on the back of some weak business investment data across the Tasman and gained against the greenback.
The kiwi rose to 93.65 Australian cents as at 5pm in Wellington from 93.22 Australian cents at the start of the day and from 93.14 cents late yesterday after figures showed Australian firms scaled back investment spending more sharply than expected in the fourth quarter, leading some economists to lower their forecasts for fourth-quarter economic growth.
"That helped the kiwi-Aussie cross, although it's not going anywhere fast," said Tim Kelleher, head of institutional foreign exchange sales for ASB Bank.
The kiwi rose to 72.01 US cents from 71.64 cents late yesterday. The trade-weighted index rose to 78.43 from 78.07.
The kiwi rose after the minutes of the Federal Open Market Committee’s latest meeting showed officials were somewhat more dovish than some market participants had expected, especially given recent comments that indicated a rate hike in March was possible.
Kelleher said the risk of a rate hike, however, remains to the upside given the Dow Jones Industrial Average keeps charting new records and economic data in the US is largely positive. The kiwi also got a lift this morning after Fonterra Cooperative Group maintained its milk payout forecast at $6 per kilogram of milk solids.
Kelleher said the 200-day moving average is about 71.33 US cents and barring any shocks it is likely to remain supported, in particular as "there's a bit of a safe-haven bid on at the moment" and New Zealand looks stable and still has a positive yield advantage.
The kiwi rose to 57.82 British pence from 57.33 pence and traded at 68.14 euro cents from 67.94 cents. The kiwi rose to 81.55 yen from 81.29 yen to 4.9531 yuan from 4.9295 yuan.
New Zealand's two-year swaps fell 2 basis points to 2.28 percent while 10-year swaps fell 3 basis points to 3.45 percent.
(BusinessDesk)
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