NZ dollar gains as risk appetite indicators improve

Tuesday 23 May 2017 08:34 AM

NZ dollar gains as risk appetite indicators improve, Fed minutes awaited

By Jonathan Underhill

May 23 (BusinessDesk) - The New Zealand dollar rose to its highest level in a month as measures of investor risk appetite improved and as the market awaits the minutes to this month's Federal Reserve policy meeting.

The kiwi rose to 69.93 US cents as at 8am in Wellington, and earlier reached 69.99 cents, from 69.36 cents late yesterday. The trade-weighted index increased to 75.55 from 75.07.

The Chicago Board Options Exchange Volatility Index (VIX) fell about 9 percent to 10.95 overnight and stocks on Wall Street rose. With no local data scheduled for today, traders will continue to look for overseas leads for the direction of the kiwi, including comments from Fed officials. Dallas Fed President Robert Kaplan said in an article published on his bank's website that he still saw scope for two more rate hikes this year and downplayed signs of weaker inflation.

"The NZD tops the leaderboard, on a day with little economic data or fresh insights," said Jason Wong, currency strategist at Bank of New Zealand. "The S&P 500 index is up 0.5 percent, while the VIX index continues to fall from last week’s spike."

The kiwi rose to 62.21 euro cents from 61.97 cents late yesterday as the euro gained against the greenback following comments from German Chancellor Angela Merkel that Germany's trade surplus reflected a euro that was too weak.

The local currency rose to 77.80 yen from 77.33 yen and gained to 4.8118 yuan from 4.7774 yuan. It rose to 53.78 British pence from 53.36 pence and gained to 93.48 Australian cents from 93.21 cents.

(BusinessDesk)

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