NZ dollar hits 2-month high as investors shun greenback

NZ dollar hits 2-month high as investors shun greenback amid weaker US data

By Tina Morrison

Dec. 23 (BusinessDesk) - The New Zealand dollar touched a two-month high in illiquid trading heading into the Christmas holiday period as investors shun the greenback.

The kiwi reached 68.36 US cents overnight, and was trading at 68.06 cents at 8am in Wellington, from 68.05 cents at 5pm yesterday. The trade-weighted index was at 73.94 from 74.02 yesterday.

The US dollar index has slid 0.54 percent so far this week following a string of weaker US data, as investors refrain from taking more 'long' positions in the dollar, where they bet on further gains in the currency, after the Federal Reserve hiked interest rates last week. The final reading of US gross domestic product showed the world's largest economy grew at a 2 percent annual pace in the third quarter, slower than the 2.1 percent rate reported last month although ahead of economist estimates in a Reuters survey for a 1.9 percent rate. A separate report showed US sales of existing homes dropped 11 percent in November, the steepest decline since July 2010.

"As trading moves into lighter holiday conditions the US dollar has continued to slip, in the backdrop of mixed US data delivery overnight," Bank of New Zealand senior market strategist Kymberly Martin said in a note. "Post the Fed’s meeting, traders may be squaring up long US dollar positions, whilst others are reluctant to put on new positions into year-end."

In New Zealand today, November trade data is scheduled for release at 10:45am. BNZ said it expects a monthly trade deficit of $640 million, compared with consensus expectations for a deficit of $810 million.

The New Zealand dollar fell to 94.07 Australian cents from 94.28 cents yesterday, weakened to 62.04 euro cents from 62.32 cents, slipped to 82.38 yen from 82.52 yen. It rose to 45.96 British pence from 45.71 pence yesterday as the UK budget deficit widened, and advanced to 4.4088 yuan from 4.4076 yuan.

(BusinessDesk)

© Scoop Media