Dollar little changed as investors await outcome of US vote
Markets are jittery as it is seen as a touchstone for any future legislation.
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Hawke’s Bay
The New Zealand dollar was little changed on the week and continues to tread water as investors wait to see if the US repeals and replaces the Affordable Care Act known as Obamacare, now viewed as a barometer on whether or not the Trump administration can deliver on its infrastructure and tax plans.
The kiwi was trading at 70.13 US cents as at 5pm in Wellington versus 70.29 at 8 am and 70.10 late Friday a week ago.
The vote to dismantle the Affordable Healthcare Act, which was previously set for Thursday, is now expected to occur Friday, as US President Donald Trump and his supporters scramble to get the necessary numbers. Markets are jittery as it is seen as a touchstone for any future legislation.
Tim Kelleher, head of institutional foreign exchange sales for ASB Bank, said if the result comes out late Friday New York time when liquidity is thin currency markets may be highly volatile. "We could get quite a gapping market," he said.
If Trump manages to get the legislation through it will likely be positive for the US dollar as it bodes well for future legislation, said Kelleher.
"I would have thought it would be a win for Trump and should be good for things like tax reforms and border repatriation stuff. It should be bullish for US dollars," said Kelleher. He noted, however, it may also benefit the New Zealand and Australian dollars as it will be quite positive for risk.
The trade-weighted index was at 76.18 from 76.33 late Thursday. The kiwi dollar fell to 56.15 British pence from 56.40 pence while it rose to 92.08 Australian cents from 91.91 cents, fell to 78.04 yen from 78.37 yen and declined to 4.8345 yuan from 4.8482 yuan. It eased to 65.12 euro cents from 65.25 cents.
The two-year swap rate rose 1 basis point to 2.30 while the 10-year swaps were unchanged at 3.41 percent.
(BusinessDesk)
Rebecca Howard
Fri, 24 Mar 2017
Fri, 24 Mar 2017
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Dollar little changed as investors await outcome of US vote
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