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NZ dollar rises vs greenback on easing trade worries

NZ dollar rises vs greenback on easing trade worries, falls vs Aussie after RBA stands pat

By Rebecca Howard

March 6 (BusinessDesk) - The New Zealand dollar rose against the US dollar as trade-war fears eased and fell versus the Australian dollar after the RBA kept interest rates on hold as expected.

The kiwi traded at 72.35 US cents as at 5pm in Wellington versus 72.22 US cents late yesterday. The kiwi traded at 92.96 Australian cents from 93.16 cents yesterday.

Risk appetite ticked up slightly as senior lawmakers from US President Donald Trump's Republican Party reportedly urged him to reconsider his tariff plan. According to Reuters, U.S. House Speaker Paul Ryan urged the Trump administration not to move forward on new tariffs on steel and aluminium announced last week, citing the risks to the economy. Sentiment was also helped as risk appetite receded in Europe as the creation of a coalition government in Germany continued to overshadow any worries about the Italian political situation. Stock in Asia lifted.

The kiwi eased back against the Australian dollar after the Reserve Bank of Australia kept rates on hold at 1.5 percent as expected by all 30 economists polled by Bloomberg and continued to signal it has no plans to adjust policy settings anytime soon.

Overall "the kiwi has largely stuck to a very tight range today," said Westpac Banking Corp market strategist Imre Speizer, noting that it spent most of the day in a 10-point range. Both the Reserve Bank of Australia and the Reserve Bank of New Zealand are widely expected to keep interest rates into the foreseeable future as inflation remains tepid in both countries.

Looking ahead, investors will be watching for tonight's GlobalDairyTrade auction with prices for whole milk powder tipped to fall with futures down 2 percent since the previous event. Rate reviews this week by the Bank of Canada, Bank of Japan and the European central bank will also be closely watched.

The trade-weighted index was at 74.44 from 74.36 yesterday. It traded at 58.58 euro cents from 58.60 cents yesterday and 52.25 British pence from 52.36 pence yesterday. The kiwi rose to 76.95 yen from 76.26 yen yesterday and gained to 4.5872 Chinese yuan from 4.5737 yuan.

New Zealand's two-year swap rate fell 2 basis points to 2.17 percent, and 10-year swaps rose 1 basis point to 3.20 percent.

(BusinessDesk)

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