NZ dollar sticks to tight range, eyes on US for direction
By Rebecca Howard
July 5 (BusinessDesk) - The New Zealand dollar stuck to a very tight range against the greenback in Asian trading as
markets await key events in the US for direction.
The kiwi traded at 67.68 US cents as at 5pm in Wellington from 67.61 cents at 8:30am and 67.65 cents late yesterday. The
trade-weighted index was at 72.44 from 72.28.
Trading was quiet partly due to the overnight Independence Day holiday in the US but also ahead of minutes from the
latest Federal Reserve policy meeting, the imposition of US tariffs on US$50 billion worth of imports from China and
non-farm payrolls data in the US Friday. Investors will be watching to see how China responds as fears of a trade war
continue to cloud markets.
"It's really waiting on those things before deciding which way to lurch," said Ross Weston, a senior trader at Kiwibank.
Weston, however, said he expects it to remain range bound between 67 US cents and 68 cents until there is a significant
driver. He also said the kiwi is finding some support as investors pare back short positions. Going short means betting
on a currency to decline and short positions have recently swelled to levels reached only a few times since 2010.
On the domestic front, Weston said the market is waiting for second-quarter inflation data due later this month, which
may be stronger-than-expected would support the kiwi, given the market has priced in a possible rate cut after the
latest cash rate review from the central bank.
The kiwi dollar traded at 4.4931 yuan from 4.4821 yuan yesterday and rose to 91.83 Australian cents from to 91.38 cents
yesterday. It traded at 74.73 yen from 74.70 yen. It was at 58.06 euro cents from 57.99 euro cents and eased 51.18
British pence from 51.24 pence.
New Zealand’s two-year swap rate fell 1 basis point to 2.13 percent while 10-year swaps were unchanged at 3 percent.
(BusinessDesk)