Article – BusinessDesk
Dec. 30 (BusinessDesk) – The New Zealand dollar gained as investors looked to take advantage of an 8.2 percent gain in the greenback over the past quarter, booking profits and squaring up their books heading into 2017.Friday 30 December 2016 08:44 AM
NZ dollar gains as investors look to book profits from surging greenback heading into 2017
By Paul McBeth
Dec. 30 (BusinessDesk) – The New Zealand dollar gained as investors looked to take advantage of an 8.2 percent gain in the greenback over the past quarter, booking profits and squaring up their books heading into 2017.
The kiwi rose to 69.44 US cents as at 8am in Wellington from 69.28 cents yesterday. The trade-weighted index edged up to 77.56 from 77.41 yesterday.
The greenback has been on a tear this quarter as the Federal Reserve delivered on an expected interest rate hike in December, and signalled a more aggressive tightening cycle in the new year after Republican candidate Donald Trump beat Hillary Clinton, on a campaign of tax reform and infrastructure spending. That’s seen yields on 10-year US Treasuries soar to 2.48 percent from 1.78 percent before the election, boosting the attraction of global bonds and also the greenback.
“In thin financial markets at the end of the financial year and end of quarter, there’s going to be some profit taking, but it will be very short-lived,” said Paul Webber, senior dealer foreign exchange at OMF in Auckland. “We could see the kiwi push into the high 69s, but I’d be surprised it we saw 70 US cents.”
The kiwi rose to 96.45 Australian cents from 96.16 cents yesterday. OMF’s Webber said that cross-rate was trading near the top of its recent ranges, and expected that trend to remain intact until either New Zealand or Australia shifted interest rates.
The local currency rose to 4.8278 Chinese yuan from 4.8180 yuan yesterday and was little changed at 80.93 yen from 80.87 yen. It increased to 56.75 British pence from 56.55 pence yesterday, and dipped to 66.21 euro cents from 66.33 cents yesterday.