You are using an older browser version. Please use a supported version for the best MSN experience.

Kiwi consolidates gains against US, AUD

NZ Newswire logoNZ Newswire 22/11/2016 Edwin Mitson

© Getty Images

The New Zealand dollar gained against its US and Australian counterparts, consolidating above US 70 cents following a run of falling sharply against the greenback.

The local currency traded at 70.78 US cents, compared to 70.37 cents at 8am on Tuesday and 69.99 cents at 5pm in Wellington on Monday.

The US dollar has rallied strongly since the victory of President-elect Donald Trump as markets expect his stimulus policies to boost inflation and economic growth in the world's largest economy. The trade-weighted index rose to 77.79 from 77.56.

Stuart Ive, senior dealer foreign exchange at OMF in Wellington said the US dollar had taken a step back in overnight trading.

"That's fed through into many different things in the commodity markets, the Kiwi as well. The New Zealand dollar has out-performed the Australian dollar in recent sessions, but with upcoming holidays in Asia, the markets are reassessing the big moves that have occurred since the US election."

The kiwi rose to 95.65 Australian cents and has traded at its highest level since September during the past 24 hours.

Another earthquake, this time in Hawke's Bay, had little impact on the Kiwi, while migration data showing another record net migration in the year to the end of October also did little to move the markets.

Ive said the markets were moving into consolidation mode but warned the Kiwi could weaken further leading up to Dec 14, when the US Federal Reserve is expected to raise rates.

The kiwi jumped against the Chinese yuan, rising to 4.8775 yuan from 4.8272 a day ago. It also rose against the Japanese yen, reaching 78.36 from 77.71 on Monday. It fell slightly against the British pound, trading at 56.67 pence from 56.71 pence. Against the euro, it traded at 66.60 cents from 66.03 cents.

The two-year swap rate fell 2 basis points to 2.19 per cent, while the ten-year swap rate fell five basis points to 3.17 per cent.

image beaconimage beaconimage beacon