Wednesday 28 September 2016 08:54 AM
NZ dollar slips from overnight highs to be little changed after stronger US confidence
By Jonathan Underhill
Sept. 28 (BusinessDesk) - The New Zealand dollar fell from its overnight highs, to be little changed after
stronger-than-expected US consumer confidence and the first US presidential debate that some commentators gave to
Democratic candidate Hillary Clinton.
The kiwi traded at 72.96 US cents, having reached as high as 73.25 cents overnight, from 72.90 cents late yesterday. The
trade-weighted index edged up to 77.37 from 77.26.
The US presidential debate dominated financial markets yesterday and was followed by figures showing US consumer
confidence printed at 104.1 in September against expectations of a gloomy 98.8. That helped nudge up the US dollar after
risk-sensitive currencies had been boosted yesterday by perceptions Clinton outshone rival Donald Trump in the debate.
The peso of Mexico, which Trump has threatened to shut out behind a border wall, also gained from the debate.
"The NZD has continued its recovery since last week’s fall, spiking as high as 0.7325 against the US dollar before
better-than-expected US consumer confidence data bolstered the USD," said analysts at HiFX. "Markets have traded tight
ranges as traders digest yesterday’s first of three eagerly awaited presidential debates, with most pundits giving
Clinton the edge."
"For a second consecutive month consumer confidence in the US increased, this time surprising the market by spiking to a
post-recession high," they said.
The kiwi has recovered after selling off in the wake of the Reserve Bank's reiteration last week that a further interest
rate cut is on the cards. New Zealand's relatively strong economy and high interest rates have supported demand for the
kiwi dollar, despite the fact the Reserve Bank plans to cut the official cash rate later this year.
The kiwi traded little changed at 95.16 Australian cents from 95.10 cents ahead of Reserve Bank of Australia assistant
governor Malcolm Edey's speech at the Australian Financial Review retail summit in Melbourne today. The local currency
rose to 4.8651 yuan from 4.8627 yuan and slipped to 73.22 yen from 73.45 yen. It increased to 64.99 euro cents from
64.84 cents and edged down to 56.06 British pence from 56.14 pence.
(BusinessDesk)
ends