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Kiwi hits month-high in quiet spell

NZ Newswire logoNZ Newswire 22/05/2017 Jonathan Underhill

The New Zealand dollar has risen to its highest level in a month as measures of investor risk appetite improved and as the market awaits the minutes to this month's Federal Reserve policy meeting.

The kiwi rose to US69.93 cents as at 8am on Tuesday in Wellington, and earlier reached US69.99c, from US69.36c late Monday. The trade-weighted index increased to 75.55 from 75.07.

The Chicago Board Options Exchange Volatility Index (VIX) fell about 9 per cent to 10.95 overnight and stocks on Wall Street rose. With no local data scheduled for Tuesday, traders will continue to look for overseas leads for the direction of the kiwi, including comments from Fed officials.

Dallas Fed President Robert Kaplan said in an article published on his bank's website that he still saw scope for two more rate hikes this year and downplayed signs of weaker inflation.

"The NZD tops the leaderboard, on a day with little economic data or fresh insights," said BNZ currency strategist Jason Wong.

"The S&P 500 index is up 0.5 per cent, while the VIX index continues to fall from last week's spike."

On Tuesday moring, the kiwi rose to 62.21 euro cents from 61.97c late Monday as the euro gained against the greenback following comments from German Chancellor Angela Merkel that Germany's trade surplus reflected a euro that was too weak.

It rose to 77.80 yen from 77.33 yen and gained to 4.8118 yuan from 4.7774 yuan. It rose to 53.78 British pence from 53.36p and gained to 93.48 Australian cents from A93.21c.

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