NZ dollar sticks to tight range as investors await Middle East developments
By Rebecca Howard
April 12 (BusinessDesk) - The New Zealand dollar stuck to a tight range as global sentiment was weighed down by the
threat of imminent US military action in Syria.
The kiwi traded at 73.58 US cents as at 5pm in Wellington from 73.53 cents at 8am and 73.46 cents late yesterday. The
trade-weighted index edged up to 75.43 from 75.28.
New Zealand's currency spent the local trading session in a 24 basis point range after investors were rattled by US
President Donald Trump declaring that missiles “will be coming” in Syria and that the White House said "all options are
on the table" in response to a suspected chemical weapons attack in Syria, according to the BBC. UK Prime Minister
Theresa May was ready to give the go-ahead for Britain to take part in action led by the US, the BBC reported.
"The market is on tenterhooks to do with the US response to Syria and the alleged gas attacks," said Michael Johnston, a
senior trader at HiFX.
The kiwi may have also gotten some support from local data such as the stronger-than-expected lift in March spending on
electronic cards. Seasonally adjusted total retail spending on credit and debit cards increased 1 percent in March,
Statistics New Zealand said. Economists polled by Bloomberg expected a lift of 0.5 percent.
Johnston said, however, the main drivers remain offshore, something he expects to continue.
The kiwi rose to 94.95 Australian cents from 94.76 Australian cents late yesterday and had outperformed its trans-Tasman
counterpart in recent sessions due to the potential impact of a global trade war across the Tasman being greater than in
New Zealand. Johnston said the cross-rate looked "stretched and unstainable" around these levels and he expects it to
"come right back," noting the historical average is closer to 85 Australian cents.
The kiwi gained to 4.6181 yuan from 4.6144 yuan late yesterday and rose to 51.91 British pence from 51.79 pence. The
kiwi traded at 59.53 euro cents from 59.40 cents and was little changed at 78.68 yen from 78.62 yen.
New Zealand's two-year swap rate lifted 3 basis points to 2.28 percent and the 10-year swap rate eased 1 basis point to
3.13 percent.
(BusinessDesk)