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Kiwi gains versus Australian counterpart

NZ Newswire logoNZ Newswire 28/12/2016 Paul McBeth

The kiwi has gained against the Australian dollar. © Hannah Peters/Getty Images The kiwi has gained against the Australian dollar. The New Zealand dollar gained against its trans-Tasman counterpart as the prospect of a slowing Chinese economy weigh more heavily on the trade prospects for Australia.

The kiwi rose to 96 Australian cents as at 5pm in Wellington from 95.85 cents on Tuesday. The local currency gained to 4.8087 Chinese yuan from 4.7807 yuan on Tuesday.

The Antipodean currencies declined heading into the Christmas holiday when Chinese president Xi Jinping said he wasn't wedded to China's 6.5 per cent economic growth target due to concerns about rising debt and an uncertain global outlook, though state media agency Xinhua on Wednesday reported the world's second-biggest economy will meet its growth target of 6.5-to-7 per cent this year and will target a rate of 6.5 per cent in 2017.

"Late Friday night was the information that China's not going to reach it's growth target, which saw the Aussie and the kiwi come off," said Tim Kelleher, head of institutional FX sales NZ at ASB Institutional.

"We've seen a bit of recovery in the kiwi today and the kiwi/Aussie cross trend higher again because our wagon isn't as tied to China as Aussie's is."

Kelleher said the kiwi could push up to 97/98 Australian cents.

The local currency rose to 69.14 US cents from 68.85 cents as at 8am and 68.79 cents on Tuesday, recovering from last week's decline heading into the Christmas holiday, though Kelleher expects it will be capped at 69.50 cents.

The kiwi rose to 2.6532 Israeli shekels from 2.6469 shekels yesterday as a diplomatic spat breaks out between New Zealand and Israel over a United Nations Security Council resolution criticising the Middle Eastern nation's settlement policy as undermining a two-state solution with Palestine.

The local currency edged up 66.04 euro cents from 65.91 cents yesterday, and increased to 56.26 British pence from 56.07 pence. The kiwi rose to 81.31 yen from 80.76 yen. The trade-weighted index increased to 77.26 from 77.09 last week.

New Zealand's two-year swap rate rose one basis point to 2.5 per cent from the Friday close, while 10-year swaps increased two basis points to 3.58 per cent.

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