NZ dollar falls back below 75 US cents

NZ dollar falls back below 75 US cents as US durable goods data helps greenback recover

BusinessDesk via sendgrid.me
11:45 AM (8 minutes ago)

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By Jonathan Underhill

July 28 (BusinessDesk) - The New Zealand dollar fell below 75 US cents, having touched a 26-month high against the greenback yesterday, after US durable goods orders rose more than expected in June, stoking optimism the world's biggest economy didn't falter in the second quarter.

The kiwi fell to 74.88 US cents as at 8am in Wellington from 75.45 cents late yesterday. The trade-weighted index declined to 78.93 from 79.21.

US durable goods orders rose 6.5 percent in June, helped by aircraft orders, beating expectations for a 3.9 percent gain. The Commerce department data comes ahead of Friday's release of the advanced gross domestic product estimate for the second quarter, which is expected to show annualised growth accelerated to 2.5 percent from 1.4 percent. The US dollar index rose, having tumbled yesterday after the market seized on Federal Reserve comments that seemed to signal a stronger intent to normalise its balance sheet.

"Markets reversed a good part of yesterday’s FOMC-related reactions, partly helped by solid US durable goods data," said Imre Speizer, senior markets strategist at Westpac Banking Corp, in a note. While tonight's GDP data is expected to show stronger growth, "risks are to the downside, centred on the consumer."

Speizer said the market is pricing in a 46 percent chance that the Fed will hike interest rates for a third time this year. The kiwi was "vulnerable to correcting further towards 74 US cents," he said.

The kiwi rose to 93.98 Australian cents from 93.70 cents yesterday and traded at 64.13 euro cents from 64.22 cents. It fell to 83.30 yen from 83.77 yen, traded at 57.30 British pence from 57.40 pence and fell to 5.0436 yuan from 5.0759 yuan.

(BusinessDesk)

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