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NZ dollar falls ahead of Fed minutes
NZ dollar falls ahead of Fed minutes, amid speculation over US tax cuts
By Rebecca Howard
May 23 (BusinessDesk) - The New Zealand dollar fell against the US dollar ahead of minutes from the last US Federal Reserve policy meeting and after US President Donald Trump hinted at further tax cuts.
The kiwi traded at 69.09 as at 5pm versus 69.28 US cents as at 8am in Wellington and from 69.43 cents yesterday. The trade-weighted index fell to 72.48 from 72.79.
The US dollar gained ground in Asian trading as investors take positions ahead of the minutes from the Federal Reserve’s last policy meeting for any hint about how many more times it might lift rates this year. US dollar sentiment may also have gotten a lift when Trump told an anti-abortion group in Washington that his administration would be "submitting additional tax cuts sometime prior to November," according to MarketWatch. It's going to be something very special," Trump was quoted as saying.
Markets were also still jittery about global trade after Trump tempered optimism over progress made so far in trade talks with China, which may have weighed on the kiwi.
"There's been a general rise in the US dollar... the FOMC minutes will be worth watching. The market is just looking for a clue on whether there will be two or three more rate hikes this year," said Westpac Banking Corp market strategist Imre Speizer. The potential for further tax cuts would also be US dollar positive, he said.
The kiwi dipped to 58.72 euro cents from 58.95 cents yesterday as investors digest the prospect of a populist coalition government in Italy between the Five Star Movement and the League, which is awaiting approval by the president.
The New Zealand dollar fell to 91.51 Australian cents from 91.62 cents yesterday and declined to 4.4037 Chinese yuan from 4.4258 yuan. It decreased to 76.33 yen from 77.01 yen yesterday and declined to 51.49 British pence from 51.74 pence.
New Zealand's two-year swap rate was unchanged at 2.19 percent while 10-year swaps fell 3 basis points to 3.16 percent.
(BusinessDesk)
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