Dollar sheds 2.1% vs greenback over week
Mr Borkin noted there was little movement against other currencies such as the Australian dollar.
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Hawke’s Bay
The New Zealand dollar is headed into the end of the week down 2.1% against the greenback and down 1.4% on a trade-weighed index basis as the market is now firmly of the view the US Federal Reserve will lift rates in mid-March.
The kiwi dollar fell to 70.37USc as at 5pm from 70.54 USc as at 8am and 71.33USc late yesterday. It opened the week at 71.90USc. The TWI fell to 77.15 from 78.23 at the beginning of the week and 77.90 late yesterday.
ANZ Bank New Zealand senior economist Philip Borkin said the market was initially uncertain about whether the Fed would move this month but after solid data and a raft of Fed speakers "all singing from the same song sheet," it is now pricing in a 90% chance of a rate hike.
Fed governor Lael Brainard, New York Fed president William Dudley and San Francisco Fed president John Williams have all indicated a rate hike is possible recently and the fact that "markets have embraced that" makes it even easier for the Fed to move, said Borkin.
Investors would be focused on a speech by Fed chairwoman Janet Yellen later in the global trading day but she is expected to also signal that March is live, he said.
Mr Borkin noted there was little movement against other currencies such as the Australian dollar: "It's really a US dollar story."
The New Zealand dollar traded at 93.12Ac from 93.18Ac . The local currency was at 57.33 British pence versus 58.10 pence and at 66.86 euro cents compared with 67.73 cents. It was at 80.32 yen from 81.28 yen and 4.8541 yuan from 4.9096 yuan.
The two-year swap rate was unchanged at 2.30% and 10-year swaps were unchanged a 3.49%.
(BusinessDesk)
Rebecca Howard
Fri, 03 Mar 2017
Fri, 03 Mar 2017
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Dollar sheds 2.1% vs greenback over week
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