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NZ dollar dips as greenback rally rolls on

NZ NewswireNZ Newswire 22/11/2016 Jonathan Underhill

The New Zealand dollar fell on expectations the US dollar will extend its post-election rally, which has helped push up US bond yields and propelled US equity markets to record highs.

The kiwi dollar fell to 70.47 US cents as at 8am in Wellington from 70.78 cents late on Tuesday. The trade-weighted index fell to 77.55 from 77.79.

The US Federal Reserve is scheduled to release the minutes of its last policy meeting and traders expect them to show confidence that inflation is returning to 'normal levels' as the US economy expands, making an interest rate hike in December a near-certainty.

The greenback has rallied in the wake of Donald Trump's US presidential win on the prospect of big federal spending and tax cuts that will stimulate the world's biggest economy.

"The US dollar has had an impressive rise since the US election and has potential to rise further, not least because the Fed will probably hike in December," said Westpac's Imre Speizer.

With little domestic economic news scheduled, traders are now awaiting figures for Australian construction work for the third quarter, which is expected to show a 1.6 per cent decline, from a 4 per cent decline three months earlier. The kiwi declined to 95.31 Australian cents from 95.65 cents on Tuesday.

The kiwi fell to 4.8581 yuan from 4.8775 yuan, traded at 78.42 yen from 78.36 yen, rose to 56.85 British pence from 56.67 pence and slipped to 66.39 euro cents from 66.60 cents.

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