Kiwi holds below 71 US cents

by NZ Adviser10 Oct 2017
The New Zealand dollar held below US$0.71, having earlier sunk to a five-month low after the special vote count on Saturday created further uncertainty over who will govern, and while talks of a North Korean missile test weighed on the greenback.

The New Zealand dollar traded at 70.75 US cents as at 5pm in Wellington last night from 70.53 cents at the start of the day and from 70.92 cents in New York on Friday. The trade-weighted index declined to 74.86 from 75.11 on Friday, BusinessDesk reported.

NZ Adviser reported yesterday morning that the kiwi is expected to drop by 1.5% as hope for US tax reform increases and coalition talks between New Zealand First and the major parties heat up.

The kiwi did drop yesterday when the market opened after the news Labour and the Greens each took a seat from National.

ASB Head of Institutional Foreign Exchange Sales Tim Kelleher said there could be a “knee-jerk” market reaction of New Zealand First aligns with Labour and the Greens, and the kiwi could “quickly slip below 70 cents”.

With little local economic data scheduled this week, politics is likely to take centre stage in the domestic market. An update of retail sales in due today with the release of electronic cards for September.

New Zealand’s two-year swap rate was unchanged at 2.20% and the 10-year swaps were steady at 3.25%, BusinessDesk reported.

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