NZ dollar retreats at signs of stronger US economy

Tuesday 25 October 2016 08:45 AM

NZ dollar retreats as signs of stronger US economy help lift greenback

By Jonathan Underhill

Oct. 25 (BusinessDesk) - The New Zealand dollar fell against a broadly stronger US dollar after figures showed US manufacturing activity at its highest levels this year, driving up the greenback.

The kiwi fell to 71.31 US cents as at 8am in Wellington from 71.57 cents in late Asian trading yesterday, with domestic trading rooms closed for the Labour Day holiday. The trade-weighted index slipped to 76.89 from 77.12.

The Markit PMI manufacturing index in the US climbed to 53.2 in October, against expectations of 51.5 and the highest in a year. The US dollar index rose to its highest level in eight months.

"The US dollar and US interest rates rose, helped by buoyant economic data. In turn, both the risk-averse JPY and pro-risk NZD performed poorly," said Imre Speizer, senior market strategist at Westpac Banking Corp. "Overall the headline (PMI figure) indicates firmer activity in Q4".

Speizer said a strong US dollar "is keeping NZD/USD contained, with a neutral bias today in the low 0.71s".

The kiwi traded at 93.74 Australian cents from 94.03 cents late yesterday. The kiwi dollar fell to 58.32 British pence from 58.66 pence yesterday. It slipped to 65.54 euro cents from 65.85 cents and fell to 74.30 yen from 74.39 yen. The kiwi declined to 4.8297 yuan from 4.8485 yuan.

(BusinessDesk)

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