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

Kiwi sheds 2.1pc vs greenback over week

NZN 3/03/2017 Rebecca Howard

The New Zealand dollar is headed into the end of the week down 2.1 per cent against the greenback and down 1.4 per cent on a trade-weighed index basis as the market is now firmly of the view the US Federal Reserve will lift rates in mid-March.

The kiwi dollar fell to US70.37c as at 5pm Friday from 70.54c as at 8am and 71.33c on Thursday. It opened the week at 71.90c.

ANZ Bank New Zealand senior economist Philip Borkin said the market was initially uncertain about whether the Fed would move this month but after solid data and a raft of Fed speakers "all singing from the same song sheet," it is now pricing in a 90 per cent chance of a rate hike.

Fed governor Lael Brainard, New York Fed president William Dudley and San Francisco Fed president John Williams have all indicated a rate hike is possible recently and the fact that "markets have embraced that" makes it even easier for the Fed to move, said Mr Borkin.

Investors will be focused on a speech by Fed chair Janet Yellen later in the global trading day but she is expected to also signal that March is live, he said.

Mr Borkin noted there was little movement against other currencies such as the Australian dollar: "It's really a US dollar story."

The New Zealand dollar traded at A93.12c from 93.18c. The local currency was at 57.33 British pence versus 58.10 pence and at 66.86 euro cents compared with 67.73c. It was at 80.32 yen from 81.28 yen and 4.8541 yuan from 4.9096 yuan.

image beaconimage beaconimage beacon