NZ dollar higher on weak US data, reduced rate cut expectations for Australia
By Rebecca Howard
Sept. 25 (BusinessDesk) - The New Zealand dollar got an overnight lift on soft US consumer confidence numbers and after
investors pared back expectations for an October rate cut in Australia.
The kiwi was trading at 63.27 US cents at 8am in Wellington from 62.96 cents at 5:05pm. The trade-weighted index was at
70.39 from 70.13.
The greenback softened after US consumer confidence fell by the most in nine months in September.
The Conference Board, an industry group, said its index of consumer attitudes fell to 125.1, from a downwardly revised
134.2 the month before. The 49 economists polled by Reuters had expected a reading of 133.5.
Kiwibank FX trader Mike Shirley said news that US President Donald Trump had “poured cold water over recent warming
hopes of a near term trade deal with China,” also added to pressure on the US dollar.
“Hopefully we can reach an agreement that will be beneficial for both countries. But as I have made very clear, I will
not accept a bad deal for the American people,” Trump told the UN General Assembly, according to CNBC.
The kiwi also got a lift when Reserve Bank of Australia governor Philip Lowe said there are "some signs that, after a
soft patch, the economy has reached a gentle turning point.”
However, he said further monetary easing may well be required. “While we are at a gentle turning point and expect growth
to pick up, the strength and durability of this pick-up remains to be seen,” he said.
Shirley said Lowe had "left the door open or ajar" for possible rate cuts, but "certainly didn’t signal that October was
a definite goer.” The RBA's next monetary policy decision is on Tuesday.
Elsewhere, risk appetite also improved after UK Prime Minister Boris Johnson’s suspension of Parliament was ruled
unlawful by the Supreme Court, reducing the possibility of a so-called hard Brexit. The kiwi was trading at 50.64
British pence from 50.60.
It was at 93.04 Australian cents from 92.90, at 57.43 euro cents from 57.24, at 67.71 yen from 67.61 and at 4.5009
Chinese yuan from 4.4772.
(BusinessDesk)
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