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No appetite for NZ dollar at Thanksgiving

NZ NewswireNZ Newswire 24/11/2016 Jonathan Underhill

The New Zealand dollar was little changed below 70 US cents, as the US Thanksgiving holiday left markets subdued, and may fall in the face of continued US dollar strength.

The kiwi dollar traded at 69.96 US cents from 69.80 cents late on Thursday, when it touched 69.68 cents, the lowest since July. The trade-weighted index rose to 77.24 from 77.15.

The kiwi dollar has declined more than 5 per cent against the greenback since November 8, when Donald Trump won the US Presidential election, heralding a new policy direction for the US that would include tax cuts and massive infrastructure spending, driving US economic growth, inflation and interest rates.

Against that, he has vowed to ditch the Trans-Pacific Partnership agreement and enact trade policies that could have implications for trading nations such as New Zealand and penalise China.

"USD strength remains the key theme in currency markets," said ANZ's David Croy. "The kiwi is holding around 0.70, but looks set to trend gradually lower as markets focus on the implications of potential US trade barriers and rapid upward re-rating of US growth prospects".

In New Zealand, traders are watching for October merchandise trade data, which is expected to show the trade deficit narrowed to $971 million from $1.4 billion a month earlier.

The kiwi rose to 56.17 British pence from 56.11 pence, traded at 66.29 euro cents from 66.26 cents, rose to 4.8392 yuan from 4.8285 yuan, gained to 79.38 yen from 78.68 yen and slipped to 94.44 Australian cents from 94.62 cents.

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