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NZ dollar hits high after Trump conference

NZN 11/01/2017 Paul McBeth

The New Zealand dollar hit a month-high as investors were disappointed US president-elect Donald Trump didn't provide much detail on his spending programme in his first press conference, prompting a sell-off in the greenback.

The kiwi rose as high as US70.87 cents, trading at US70.60c as at 8am in Wellington from 69.97 cents yesterday. The trade-weighted index advanced to 77.88 from 77.45.

The US dollar index, a measure of the greenback against a basket of currencies, fell 0.5 per cent after Trump's hour-long press conference focused on reports of Russian interference in last year's US presidential election and an intelligence report that Russia holds compromising information about the president-elect.

Investors were hoping for more details about Trump's planned spending on infrastructure and tax reform, which took a back seat in the briefing.

"The USD index was trading a fairly steady path higher overnight, before a bout of volatility as the US president-elect gave a scheduled press conference early this morning," Bank of New Zealand senior market strategist Kymberly Martin said in a note.

"He covered many topics, but gave little detail on any fiscal stimulus plans. After his free-ranging comments the USD has fallen."

The kiwi rose to 57.70 British pence from 57.46 pence yesterday after Bank of England governor Mark Carney told policymakers the UK's exit from the European Union was no longer the biggest domestic threat to financial stability, and that the cost of not setting up a transitional deal would be higher for the continent than for the UK.

The local currency increased to 66.58 euro cents from 66.30 cents yesterday.

The kiwi edged up to 81.25 yen from 81.12 yen yesterday and climbed to 4.8944 Chinese yuan from 4.8432 yuan. It was little changed at 94.74 Australian cents from 94.77 cents.

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