NZ dollar ekes out 0.1% weekly gain, treading water amid geopolitical turbulence
By Rebecca Howard
May 25 (BusinessDesk) - The New Zealand dollar is headed for a 0.1 percent weekly gain against the greenback and is
largely treading water as markets eye the political turbulence between the US and North Korea.
The kiwi dollar traded at 69.20 US cents as at 5pm in Wellington versus 69.29 US cents as at 8am and 69.25 cents late
yesterday. It was at 69.10 last Friday in New York. The trade-weighted index was at 72.59 from 72.68.
The kiwi benefited when the US dollar came under pressure after US President Donald Trump called off a planned summit
with North Korean. It held those gains in Asian trading after North Korea said it was still open to talks.
ANZ Bank senior macro-strategist Phil Borkin said he expects it to stick to a tight range, in particular given the
holiday weekend in the US. He likened the New Zealand dollar to a "beach ball underwater" and said it continued to have
firm support around the 69.00 US cent level. "It's hard for it to push lower, there's underlying demand," he said.
"We are treading water and I don't see that changing in the near term," he said.
Looking ahead, Borkin said investors will be watching for next week's financial stability report from the Reserve Bank,
in particular as it is Adrian Orr's first as governor of the bank. The government's announcement on whether it will try
to eradicate or manage the Mycoplasma bovis cow disease will also be watched. The government is expected to announce its
decision on Monday.
The kiwi dollar traded at 51.77 British pence from 51.79 and 59.10 euro cents from 59.14 cents yesterday and was
unchanged at 91.47 Australian cents. It fell to 4.4197 yuan from 4.4255 yuan and was unchanged at 75.81 yen.
New Zealand's two-year swap rate was unchanged at 2.18 percent while 10-year swaps were unchanged at 3.14 percent.
(BusinessDesk)