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Kiwi steady after Trump's Obamacare defeat

NZ Newswire logoNZ Newswire 26/03/2017 Jonathan Underhill

The New Zealand dollar was little changed against a slightly weaker US dollar after US president Donald Trump failed to win enough support to repeal and replace the Affordable Care Act known as Obamacare, raising questions about his ability to deliver policy reforms.

The kiwi traded at US70.23 cents as at 8am on Monday in Wellington from US70.27c in late New York trading on Friday. The trade-weighted index slipped to 76.18 from 76.26.

Mr Trump supporters had hoped for the fast passage of legislation with a Trump administration presiding over a Republican-dominated parliament. Mr Trump has said he will now focus on tax reform after the healthcare setback, targeting a policy that would include tax cuts and is seen as a boost to the US economy.

With little on the domestic calendar in the way of economic releases, the kiwi is likely to take its lead from offshore developments this week, traders say.

"Failing to pass the bill when the party controls the White House and both houses of Congress is not only embarrassing for President Trump but also casts serious doubts on President Trump's ability to pass other legislative reforms," said traders at HiFX, in a note.

HiFX said in a data-light week, US consumer confidence for March, due out Tuesday in the US, and US fourth-quarter gross domestic product on Thursday will likely be the highlights. Locally, business confidence for March is due out on Thursday and February dwelling consents are scheduled for release on Friday.

On Monday morning, the kiwi fell to 56.18 British pence from 56.27p on Friday in the US while it was steady at 92.15 Australian cents from A92.14c. It fell to 77.81 yen from 78.16 yen and declined to 4.8320 yuan from 4.8362 yuan. It eased to 64.87 euro cents from 65.06 cents.

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