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NZ dollar falls against stronger greenback

NZ NewswireNZ Newswire 30/08/2016 Jonathan Underhill

The New Zealand dollar has fallen against a broadly stronger US dollar as commodity prices fell, US consumer confidence rose and Japan signalled its willingness to tackle gains in the yen.

The kiwi fell to US72.15 cents as at 8am on Wednesday in Wellington from US72.47c late on Tuesday. The trade-weighted index eased to 77.10 from 77.18.

The US dollar index has climbed about 1.5 per cent since Friday in the US, when Federal Reserve chairwoman Janet Yellen and vice chairman Stanley Fischer talked up the prospects of interest rate hikes this year.

Sentiment for the greenback was helped overnight by figures showing US consumer confidence rose more than expected this month to the highest since September last year, while currencies tied to raw materials, such as the kiwi, retreated.

"The US dollar is stronger across the board, as investors have one eye on a possible rate hike later in the year," said BNZ currency strategist Jason Wong.

The market was gradually losing interest in pricing in the chance of a US hike as soon as September and a hike in December was expected, he said.

The odds of a US hike in September are just 34 per cent while December's chances are rated by the market at 69 per cent, he said.

Mr Wong said the ANZ Business Outlook for August, due out on Wednesday, was likely to be the main piece of important data for the market but the main event this week is still non-farm payrolls data due out in the US on Friday.

On Wednesday morning the kiwi rose to 74.28 yen from 74 yen late on Tuesday. The local currency rose to 96.05 Australian cents from A95.71c, breaking above A96c for only the second time since mid-July.

The kiwi fell to 4.8180 yuan from 4.8373 yuan, was little changed at 64.73 euro cents from 64.89 cents and fell to 55.16 British pence from 55.40p.

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