You are using an older browser version. Please use a supported version for the best MSN experience.

NZ dollar holds onto earlier gains

NZ Newswire logoNZ Newswire 22/02/2017 Rebecca Howard

The New Zealand dollar held on to earlier gains as markets await minutes from the US Federal Reserve's latest meeting and several more speeches from Fed officials for a steer on where US interest rates may be heading.

The kiwi traded at US71.64 cents as at 5pm Wednesday from 71.62c at 8am in Wellington and 71.55c late Tuesday.

Two Fed officials were leaning towards higher US interest rates in speeches overnight, and the pace and timing of Fed hikes are being keenly watched by investors on the expectation that a return to normal monetary policy will renew demand for the greenback. The Fed is due to release the minutes later in the global trading day.

"The data in the US looks good, some would argue they are meeting their dual mandate and we are just waiting for confirmation from the Fed to see if that's consistent with them tightening next month," said ANZ Bank New Zealand senior economist Philip Borkin.

Dairy product prices fell at the Global Dairy Trade auction, stemming two straight gains, amid increased supply. The GDT price index fell 3.2 per cent to US$3,474, down from US$3,537 at the previous auction two weeks ago. Whole milk powder slid 3.7 per cent to US$3,189 a tonne.

Mr Borkin said the local currency quickly shrugged off a weaker dairy auction as the fall was largely anticipated and "you could even argue that the fall wasn't as big as what the futures market suggested anyway."

AgriHQ dairy analyst Susan Kilsby said, however, the outlook remains positive.

Data showed Australian wage growth remained subdued in the fourth quarter but the Australian dollar also remained firm against the greenback. The kiwi dipped to A93.14 cents from 93.26c.

The local dollar slipped to 57.33 British pence from 57.52 pence but rose to 67.94 euro cents from 67.62 cents. The kiwi was little changed at 81.29 yen and traded at 4.9295 yuan from 4.9255 yuan.

image beaconimage beaconimage beacon