NZ dollar firm against greenback as risk appetite ticks up

NZ dollar firm against greenback as risk appetite ticks up

By Rebecca Howard

Dec. 11 (BusinessDesk) - The New Zealand dollar remained firm against the greenback after news that Chinese and US officials are still talking helped alleviate some fears of a global slowdown.

The kiwi traded at 68.81 US cents at 5pm in Wellington versus 68.73 US cents at 8am and from 68.90 cents yesterday. The trade-weighted index was at 75.24 from 75.13.

China's state-owned Xinhua News Agency reported that Chinese Vice Premier Liu He on Tuesday called U.S. Treasury Secretary Steven Mnuchin and Trade Representative Robert Lighthizer and the two sides exchanged views on the timetable and the roadmap for the trade talks.

"It got a bit of a boost on the positive China headlines," said Ross Weston, head of trading for Kiwibank.

Overall, the kiwi has been "remarkably resilient" given how jittery markets are. "Given the multitude of risks out there, you would expect it to be lower," said Weston. "That might have something to do with New Zealand's relatively good fiscal state or the fact that things are just bubbling along."

The kiwi gained strongly against the pound after British Prime Minister Theresa May postponed a parliamentary vote on her Brexit deal, saying it faced certain defeat and Weston said any Brexit-related headlines will continue to move the pair. It traded at 54.70 British pence from 54.06 pence yesterday.

Looking ahead, Weston said the main event risk for the New Zealand dollar is next week's third-quarter reading on economic growth. He said, however, Thursday's half-year economic and fiscal update from the Treasury could push it around. "The market will likely have some sort of reaction if they downgrade their forecasts," he said.

The kiwi traded at 95.45 Australian cents from 95.46 cents yesterday.

The local currency increased to 60.52 euro cents from 60.26 cents yesterday and rose to 77.76 yen from 77.40 yen. It advanced to 4.7473 Chinese yuan from 4.7453 yuan.

New Zealand's two-year swap rate fell one basis point to 2.03 percent; the 10-year swaps eased 1 basis point to 2.74 percent

(BusinessDesk)

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