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NZD little changed amid volatility spikes

NZ Newswire logoNZ Newswire 11/02/2018 Jonathan Underhill

The New Zealand dollar has started the week little changed, holding onto the gains it made on a volatile Friday in New York, but potentially retreating as investors' risk appetite wanes.

The kiwi traded at 72.42 US cents as at 8am in Wellington from US72.44c in New York on Friday.

The trade-weighted index was at 74.56 from 74.57.

US stocks ended Friday on a positive note, recovering from an earlier sell-off, while the Chicago Board Options Exchange Volatility Index rose as high as 41 before ending at 29.

Meanwhile, President Donald Trump signed a two-year Budget agreement, providing US$300 billion ($NZ414b) of federal spending and preventing the government from shutting down.

"The kiwi is behaving remarkably well and largely thumbing its nose at the volatility seen elsewhere," ANZ Bank New Zealand senior economist Philip Borkin said.

"We don't think that will be sustained and feel that equity market volatility will eventually result in a broader assessment of risk appetites overall, putting the NZD on the defensive."

Mr Borkin said US inflation data due on Thursday will be a key focus this week.

On Monday, traders in New Zealand will be watching for electronic cards for January for an update on the mood of consumers.

The kiwi rose to 92.72 Australian cents from A92.61c on Friday.

It increased to 52.41 British pence from 52.34 pence and rose at 59.10 euro cents from 58.85 cents. It gained to 4.5600 yuan from 4.5587 yuan and was little changed at 78.76 yen.

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