NZ dollar dips on Wheeler but pares losses as North Korea fears ease
By Rebecca Howard
Aug. 30 (BusinessDesk) - The New Zealand dollar dipped briefly after Reserve Bank governor Graeme Wheeler made what may
be his last official attempt to jawbone the kiwi lower before paring its losses as fears about North Korea's latest
missile test receded in Asia.
The kiwi was trading at 72.61 US cents as at 5pm in Wellington from 72.51 US cents as at 8am and from 72.25 cents late
yesterday. The trade-weighted index rose to 75.89 from 75.66.
The New Zealand dollar dipped to 72.34 US cents after Wheeler "couldn't resist taking a crack at the kiwi," said Mark
Johnson, senior dealer at OMF.
In his final official speech before retiring in September Wheeler told the Northern Club in Auckland that a lower New
Zealand dollar "is needed to increase tradables inflation and help deliver more balanced growth". It dropped as low as
90.71 Australian cents, a five-month low, from 91.19 cents but was trading at 90.91 Australian cents as at 5pm.
"The fall proved fleeting," said Johnson, who added the New Zealand dollar is stuck in a tight range with support at 72
US cents and resistance at 73.35 cents.
The kiwi was helped by reduced fears that North Korea's firing of a missile over Japan’s northern island of Hokkaido
would lead to escalating tensions on the Korean peninsula. Johnson noted that US President Donald Trump had said all
options were on the table regarding a response but "was short on detail."
Overall, "risk sentiment would certainly appear to have recovered,' he said. The easing fears helped the kiwi gain back
some ground against the yen, traditionally seen as a safe haven in times of trouble. The kiwi was trading at 79.69 yen
from 78.58 yen late yesterday.
Looking ahead, markets will now be watching for US jobs data later in the week for direction.
The kiwi dollar rose to 60.62 euro cents from 60.32 cents, gained to 56.14 British pence from 55.82 pence and rose to
4.7785 yuan from 4.7735 yuan.
The two-year swap rate rose 3 basis points to 2.17 percent while the 10-year swaps rose 3 basis points to 3.11 percent.
(BusinessDesk)