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Kiwi Firms In Lacklustre Trading

Contributor:
Fuseworks Media
Fuseworks Media

Wellington, May 5 NZPA - The New Zealand dollar held firm in lacklustre trading today, assisted by positive data out of Australia.

Dealers said robust house price, job ads and inflation data in Australia provided more excitement this afternoon than New Zealand's mixed labour cost data.

"That just served to underpin the aussie and the kiwi was dragged up for the ride," BNZ currency analyst Danica Hampton said.

At 5pm the kiwi dollar closed higher at US78.25c versus US77.77c on Friday, and the Australian dollar closed locally at US93.86c (US93.26c).

Ms Hampton said there was also a bit of lingering interest from the marked improvement in risk appetite seen last week.

She thought the kiwi would hit resistance around US78.40-50c, "and if it does manage to edge above that, I really think it will struggle towards US79c".

"I think the risks are definitely to the downside and as the market comes round to thinking about Thursday's Household Labour Force Survey, and just lingering concerns about the deteriorating New Zealand outlook, [it] will weigh on the currency."

On the crosses, the kiwi ended flat against the Australian dollar at A83.37c, but interest from the carry trade pushed the kiwi-yen up again today to 82.32, from 81.37 yen on Friday.

The trade-weighted index rose to 70.17 (69.75).

The greenback retained its firming bias, but with Japan out for a public holiday today, it tended to crab sideways.

"I think the bias will be for the US dollar to remain firm but the main events this week will be the ECB (European central bank) decision and the Bank of England decision on Thursday," Ms Hampton said.

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