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Kiwi falls amid 'crossfire' of support

NZ Newswire logoNZ Newswire 19/02/2017 Jonathan Underhill
New Zealand coin is arranged for a photograph in Wellington, New Zealand © Mark Coote New Zealand coin is arranged for a photograph in Wellington, New Zealand

The New Zealand dollar has fallen ahead of minutes of the latest US Federal Open Market Committee meeting and as investors weigh the competing forces of a robust local economy and optimism about the outlook for the US.

The kiwi traded at US71.84 cents as at 8am on Monday in Wellington, little changed from late New York trading on Friday and from US72.04c in Wellington at the end of last week. The trade-weighted index was at 78.26 from 78.35 in New York.

The Fed minutes come after chair Janet Yellen's testimony to Congress last week in which she said the central bank shouldn't wait too long to raise interest rates, and hinted it could come as soon as March.

US markets are closed for the Presidents Day holiday on Monday. Locally, traders are awaiting the BNZ-BusinessNZ performance of services index and producer prices for the fourth quarter in what is otherwise a relatively quiet day for economics while being the peak week for corporate earnings.

The kiwi is "still caught in the crossfire of US dollar support and the same towards the New Zealand economy," says ANZ chief economist Cameron Bagrie.

On Monday morning the kiwi traded at 57.82 British pence, little changed from New York and up from 57.61p in Wellington on Friday.

It traded at 67.70 euro cents from 67.67c in New York and from 67.47c in Wellington on Friday.

It was little changed from Friday in New York at 81.06 yen and was down from 81.61 yen in Wellington at the end of last week. The kiwi traded at 4.9311 yuan from 4.9304 yuan in New York on Friday and traded at 93.53 Australian cents from A93.56c last week.

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