NZ dollar touches 10-month high

NZ dollar touches 10-month high as weak crude, Trump wobbles weigh on greenback

By Jonathan Underhill

July 24 (BusinessDesk) - The New Zealand dollar rose to a 10-month high amid ongoing headwinds for US president Donald Trump and a 3 percent drop in the price of crude oil.

The kiwi traded at 74.39 US cents as at 8am in Wellington, having touched 74.61 cents in New York on Friday, the highest since September last year, from 74.22 cents in Asia at the end of last week. The trade-weighted index slipped to 78.71 from a month-high 78.82 in NewYork on Friday.

The US dollar index dropped to a 13-month low on Friday as crude oil and Treasury bond yields fell and White House press secretary Sean Spicer became the latest member of Trump's team to leave. The failure of the Republican-dominated US Senate to agree on reforming Obamacare has doused optimism Trump will be able to enact policies seen as giving a boost to the US economy including tax cuts and infrastructure spending. Traders will be watching this week for the Federal Open Market Committee meeting and any talk that a third rate hike this year is less likely.

"The US dollar and bond yields fell amid a 3 percent slide in oil prices. Apart from oil prices, the resignation of the White House press secretary also attracted market attention. Fed fund futures yields priced the chance of a December rate hike at around 43 percent," said Imre Speizer, senior markets strategist at Westpac Banking Corp.

The kiwi rose to 94.01 Australian cents from 93.74 cents on Friday in New York, returning it to where it had been left in Asia at the end of last week when the Aussie dollar lost ground when Reserve Bank of Australia deputy governor Guy Debelle underscored "the fact that other central banks increase their policy rates does not automatically mean that the policy rate here needs to increase" and talked down the Aussie dollar, in a speech published on the central bank's web site.

The kiwi traded at 63.73 euro cents from 63.67 cents in New York on Friday and rose to 82.65 yen from 82.54 yen. It traded at 57.22 British pence from 57.18 pence and gained to 5.0335 yuan from 5.0274 yuan.

(BusinessDesk)

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