NZ dollar heads for 0.5% weekly decline as risk aversion rises
By Rebecca Howard
March 16 (BusinessDesk) - The New Zealand dollar is headed for a 0.5 percent weekly decline against the greenback on
rising risk aversion as markets fret about a possible trade war and more changes in White House Staff.
The kiwi dollar traded at 72.44 US cents as at 5pm from 72.69 US cents as at 8am in Wellington and from 73.27 cents late
yesterday. It traded at 72.80 US cents last Friday in New York. The trade-weighted index fell to 74.42 from 74.95 late
yesterday.
ASB Bank said the greenback came under pressure in Asian trading as investors sought the safe-haven yen on jitters about
the potential global trade war and as equity markets slipped. The kiwi fell to 76.69 yen from 77.68 yen. Investors were
also nervous after Washington Post reported President Donald Trump had decided to fire National Security Adviser H.R.
McMaster, the latest in a raft of changes.
Looking ahead, the kiwi is likely to lose further ground next week economists see no prospect of acting Reserve Bank
governor Grant Spencer lifting the official cash rate in his final review on Thursday and do not expect him to deviate
from the line that rates are on hold for the foreseeable future given the lack of inflation. All 13 economists polled by
Bloomberg expect the OCR to stay at a record low 1.75 percent next Thursday.
The US Federal Reserve, on the other hand, is widely expected to lift rates next week by a quarter-point, which will
further lessen the kiwi's allure.
The kiwi gained to 93.12 Australian cents from 93.01 cents. It fell to 58.85 euro cents from 59.20 cents and to 52.00
British pence from 52.39 pence and declined to 4.5840 yuan from 4.6237 yuan.
New Zealand's two-year swap rate fell 1 basis point to 2.26 percent and the 10-year swap rate fell 1 basis points to
3.18 percent.
(BusinessDesk)
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