NZ dollar jumps to five-month high as risky assets find favour as US avoids debt default
By Tina Morrison
Oct. 17 (BusinessDesk) – The New Zealand dollar surged to a five-month high as riskier assets gained favour after US
politicians agreed a deal which would pass the US budget and lift the nation’s borrowing limit, averting a debt default.
The kiwi jumped as high as 84.44 US cents, and was at 84.33 cents at 8am in Wellington, from 83.89 cents at the 5pm
market close yesterday. The trade-weighted index rose to 78.17 from 77.89 yesterday.
Sentiment turned positive, boosting risky assets such as equities, on news that US politicians have ended a stalemate
that resulted in a partial government shutdown and threatened to force the US into an historic debt default. The deal to
be voted on today will extend the US borrowing authority until Feb. 7 and fund government agencies until Jan. 15.
“A deal is as good as done and markets have responded predictably, with the kiwi/US higher” said Imre Speizer, market
strategist at Westpac Banking Corp. “That’s positive news globally, so you would expect risky asset classes to go up.
The kiwi is a risky asset and that is why it will go higher.”
In New Zealand today, traders will be eyeing the ANZ Consumer Confidence survey for October, scheduled for release at
1pm.
In Australia, the NAB Business Confidence report for the third quarter will be published at 1:30 New Zealand time. The
New Zealand dollar advanced to 88.25 Australian cents from 88.06 cents yesterday.
The kiwi touched a month high of 83.33 yen this morning, from 82.65 yen yesterday, as safe haven currencies fell out of
favour.
The local currency rose to 62.31 euro cents from 62.08 cents yesterday and advanced to 52.87 British pence from 52.52
pence.
(BusinessDesk)