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Hot Topic Hawke’s Bay
Hot Topic Hawke’s Bay
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Kiwi gains as possible US government shutdown looms

US legislators have until January 19 to avoid a government shutdown.

Paul McBeth
Thu, 18 Jan 2018

The New Zealand dollar continued its volatile start to the year, rising back above 73 US cents as the threat of a federal government shutdown in the US weighs on the greenback.

The kiwi rose to 73.25 US cents as at 8am in Wellington from 72.54 cents yesterday. The trade-weighted index advanced to 75.25 from 74.69 yesterday.

US legislators have until January 19 to avoid a government shutdown and Republican policymakers are expected to push for a stopgap funding bill before money for federal agencies expires, although opposition Democrat members are yet to decide whether to support another short-term measure. That uncertainty has weighed on the greenback, which has been under pressure in recent weeks as other currencies are boosted by rising commodity prices and growing optimism about Europe's economy.

"It feels like there is some nervousness about a possible US government shutdown this weekend, with some of the ups and downs reflecting news headlines about that," Bank of New Zealand currency strategist Jason Wong said in a note. "News that House Republicans were coalescing behind a plan to avert a shutdown helped support the USD and nudge the NZD down yesterday afternoon but there has been no fresh news on this overnight, suggesting that internal debate amongst Republicans continues."

Local data today includes Real Estate Institute house sales volumes and prices for December, which are expected to show resilient price and a recovery in turnover after volumes slumped ahead of the September election.

The kiwi rose to 90.73 Canadian cents from 90.27 cents yesterday after the Bank of Canada hiked interest rates a quarter-point to 1.25 percent as expected due to the stronger run of economic data through the end of last year.

The local currency gained to 91.32 Australian cents from 91.10 cents yesterday ahead of employment data across the Tasman which is expected to show continued growth in Australia's labour market.

The kiwi advanced to 4.7122 Chinese yuan from 4.6650 yuan yesterday and rose to 81.06 yen from 80.24 yen. It gained to 59.70 euro cents from 59.15 cents yesterday and was little changed at 52.65 British pence from 52.61 pence.

(BusinessDesk)

Paul McBeth
Thu, 18 Jan 2018
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Kiwi gains as possible US government shutdown looms
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