NZ dollar treads water ahead of key data later in week

Article – BusinessDesk

July 31 (BusinessDesk) – The New Zealand dollar inched higher as the greenback remains out of favour and investors await key data later in the week.NZ dollar treads water ahead of key data later in week

By Rebecca Howard

July 31 (BusinessDesk) – The New Zealand dollar inched higher as the greenback remains out of favour and investors await key data later in the week.

The kiwi traded at 75.06 US cents at 5pm versus 74.99 US cents at 8am in Wellington, having reached 75.23 cents in New York on Friday from 74.75 cents in Asia last week. The trade-weighted index was at 78.97 from 79.04 in New York.

“It hasn’t moved a lot. We are still of the view that it’s going to be a struggle up here for the kiwi but certainly calling it meaningfully lower against a backdrop where the US dollar is struggling is a hard one. That’s the opposing tension right here, right now,” said ANZ Bank New Zealand senior economist Phil Borkin.

He said there are some key developments this week that will help determine direction, pointing to the Reserve Bank of Australia’s rate decision Tuesday, followed by domestic jobs data Wednesday and US manufacturing data and jobs data. Investors are also awaiting speeches by Cleveland Federal Reserve President Loretta Mester and San Francisco Fed President John Williams this week for further clues about the Fed’s plans.

“You could argue that sentiment is so bearish the US dollar right that perhaps the risk is that if we start to see some positive surprises you could start to see some love return to the US dollar but it’s a brave call to make at the moment,” said Borkin.

The kiwi traded at 94.06 Australian cents from 94.05 cents in New York on Friday and traded at 63.95 euro cents from 63.97 cents. It was at 82.96 yen from 83.09 yen, traded at 57.16 British pence from 57.21 pence and fell to 5.0495 yuan from 5.0596 yuan.

New Zealand’s two-year swap rate was unchanged at 2.21 percent while the 10-year swaps rose 1 basis point to 3.28 percent.

(BusinessDesk)

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