Kiwi rallies on cautious Fed comments
Traders will be watching for the release of second-quarter gross domestic product in Australia.
Traders will be watching for the release of second-quarter gross domestic product in Australia.
The New Zealand dollar climbed more than 1% against the greenback after a Federal Reserve governor pointed to weak US inflation, US President Donald Trump flagged military sales to South Korea and Japan, and dairy prices rose modestly in the latest dairy auction.
The kiwi rose to 72.38USc as at 8am in Wellington and earlier touched a week-high of 72.63USc from 71.69USc late yesterday. The trade-weighted index gained to 75.52 from 74.93.
The US dollar weakened overnight after Fed governor Lael Brainard said inflation was below the central bank's target, suggesting little need to rush to hike interest rates while in the continuing war of words between the US and North Korea, Trump tweeted that he would allow increased weapon sales to South Korea and Japan, while a diplomat from the North reportedly promised "gift packages" would be sent to the US. Meanwhile, Hurricane Irma, which has been upgraded to a category 5 storm, is headed for Florida. US financial markets reopened after the Labor Day holiday on Monday.
"We were reminded that US dollar sentiment remains fickle, with dovish Fed comments and continuing North Korean tensions weighing on the greenback," said Con Williams, rural economist at ANZ Bank New Zealand.
The GDT price index rose 0.3% to $US3323 in the latest Global Dairy Trade auction, as gains in milk fats offset a decline in milk powders, meeting market expectations. Whole milk powder declined 1.6% to US$3,100 a tonne.
With no local economic data scheduled, traders will be watching for the release of second-quarter gross domestic product in Australia, with growth expected to have accelerated to 0.9% in the quarter for an annual pace of 1.9%.
The kiwi rose to 90.51Ac from 90.01Ac yesterday. It gained to ¥78.75 from ¥78.39 and rose to 60.75 euro cents from 60.20 cents. It traded at 55.54 British pence from 55.42 pence and rose to 4.7290 yuan from 4.6854 yuan.
(BusinessDesk)