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NZ dollar gains on threat of US govt shutdown

Article – BusinessDesk

NZ dollar gains as threat of US govt shutdown weighs on greenback By Paul McBethNZ dollar gains as threat of US govt shutdown weighs on greenback

By Paul McBeth

Jan. 19 (BusinessDesk) – The New Zealand dollar rose back above 73 US cents as the looming deadline for US policymakers to extend funding for the federal government to avoid a shutdown weighed on the greenback and pushed up US interest rates.

The kiwi gained to 73.08 US cents as at 8.30am from 72.60 cents yesterday. The trade-weighted index advanced to 75.15 from 74.89 yesterday.

US legislators have a Jan. 19 deadline to extend funding measures to avoid freezing federal government functions and need buy-in from the Democrat opposition to pass legislation in the Senate, where the ruling Republican party holds a smaller majority. That uncertainty has weighed on the greenback and pushed the yield on US 10-year Treasuries to 2.61 percent, the highest they’ve been since March last year.

“Focus is currently on Washington where a US government shutdown deadline looms this weekend unless a stopgap funding bill is agreed,” Bank of New Zealand currency strategist Jason Wong said in a note. “The lack of any positive news on the threat of a US government shutdown has since seen broadly based weakness in the USD and the NZD push back up through the US$0.73 mark.”

Local data today include the Business New Zealand-BNZ performance of manufacturing index, with investors focused on whether the slump in business confidence has stifled industrial production.

The local currency edged up to 91.38 Australian cents from 91.26 cents yesterday and gained to 4.6893 Chinese yuan from 4.6739 yuan. It traded at 81.13 yen from 80.91 yen yesterday and was little changed at 59.63 euro cents from 59.60 cents. the kiwi increased to 52.69 British pence from 52.58 pence yesterday.

(BusinessDesk)

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