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Kiwi benefits from Trump press conference

NZ Newswire logoNZ Newswire 12/01/2017 Rebecca Howard

The New Zealand dollar continued to hover at its highest level since mid-December against the greenback on Thursday, as traders pushed down the value of the US currency following President-elect Trump's press conference.

The local currency was trading at 70.77 US cents at 5pm in Wellington, from 70.60 US cents at 8am and 69.97 US cents twenty-four hours ago. The trade-weighted index rose to 77.90 from 77.45 on Wednesday.

The US dollar came under pressure early in the Asian session after US president-elect Donald Trump offered few details on infrastructure and tax reform in his hour-long press conference. Instead, he chose to focus on reports of Russian interference in last year's US presidential election.

The conference was disappointing and weighed on the greenback even though Trump didn't say anything negative about the US dollar, said ASB head of FX institutional sales New Zealand Tim Kelleher.

"The market has been very bearish in US bonds and extremely bullish on the US dollar and we are just seeing some unwinding of that," he said.

The weaker greenback in Asia, particularly against the Japanese yen, is helping shore up both the Aussie and the Kiwi, he said. Events in the US are likely to remain the main driver of the kiwi into the foreseeable future but "I don't think we are going anywhere fast."

The "big line in the sand" for a solid push downwards is still 68.50, said Kelleher. Investors will be watching for Friday's electronic card spending data for further evidence of strong consumer demand.

Following a 2 per cent fall in the value of the kiwi against the Australian cents since Jan 3, the kiwi was broadly flat in trading on Thursday, trading at 94.79 Australian cents from 94.77 Australian cents on Wednesday. It gained against the British pound, trading at 57.94 pence from 57.46 pence.

Against the Chinese yuan, the kiwi rose to 4.8896 yuan from 4.8432 yuan twenty-four hours ago. It dropped against the Japanese yen, to 80.99 yen from 81.12 yen. It was trading at 66.70 against the Euro versus 66.30 euro cents.

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