NZ dollar little changed as risk sentiment improves, commodities slip
By Jonathan Underhill
Nov. 17 (BusinessDesk) - The New Zealand dollar was little changed, having fallen to a two-week low overnight, as a
measure of risk appetite improved but commodity prices fell, leaving the kiwi struggling against a mixed global
backdrop.
The kiwi dollar traded at 68.53 US cents as at 8:30am in Wellington, having touched 68.34 cents overnight, from 68.55
cents late yesterday. The trade-weighted index was at 72.68 from 72.70.
The CRB Index of 19 commonly traded commodities fell 0.2 percent overnight while the the Chicago Board Options Exchange
Volatility Index (VIX), known as Wall Street's fear gauge, dropped almost 13 percent. Traders will be watching for a
survey of New Zealand manufacturing today for any signs sentiment has shifted in the wake of the change of government
and will also be keeping an eye on the progress of US tax reform plans.
"Market sentiment improved overnight as global equities rebounded and yields rose. However, the US dollar and
commodities were more mixed," said Philip Borkin, senior economist at ANZ Bank New Zealand, in a note. "Despite a bounce
in risk sentiment, the NZD has underperformed, suggesting it could head into the weekend threatening to push lower."
Yesterday, the US House of Representatives approved the package of tax cuts that Reuters described as the biggest tax
code overhaul in a generation in a vote that was won 227 to 205, shifting the debate to the Senate. Tax cuts were seen
as one of the economy-stimulating policies heralded by US President Donald Trump, although he has struggled to gain
policy traction in the Republican-dominated House.
"We suspect support levels will hold, keeping it (the kiwi) range-bound today, although any US tax reform progress will
be key to watch," Borkin said.
The kiwi traded at 90.30 Australian cents from 90.24 cents yesterday, when the local currency fell following a drop in
the Australian jobless rate. It traded at 51.99 British pence from 52.04 pence and at 58.26 euro cents from 58.20 cents.
It was at 4.5424 yuan from 4.5497 yuan and traded at 77.47 yen from 77.45 yen.
(BusinessDesk)
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