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NZ dollar static as market fears ease

NZ NewswireNZ Newswire 2/10/2016 Paul McBeth

The New Zealand dollar was little changed as the prospect of a smaller settlement by Deutsche Bank with US authorities eased market fears a big penalty could have wider ramifications for the financial sector.

The kiwi traded at 72.65 US cents at 8am in Wellington from 72.81 cents at the New York close on Friday and 72.64 cents at 5pm in Wellington. The trade-weighted index was at 77.13 from 77.17.

The Chicago Board Options Exchange's Volatility Index, known as Wall Street's 'fear gauge', fell 5.2 per cent as investors were soothed by a report that Deutsche Bank would settle an investigation with the US Department of Justice into the sale of mortgage-backed securities.

The AFP report said it would make a $US5.4 billion payment, less than the $14 billion claim first reported. That bolstered appetite for risk-sensitive assets at the end of the week, pushing up stock markets.

The local currency rose to 56.29 British pence from 56.10 pence on Friday in New York after UK Prime Minister Theresa May outlined plans to trigger an exit from the European Union by the end of March next year. It was little changed at 64.69 euro cents from 64.75 cents last week.

The kiwi traded at 94.82 Australian cents from 94.88 cents last week ahead of the Reserve Bank of Australia's first policy review under new governor Philip Lowe on Tuesday, with traders expecting no change.

The New Zealand dollar was little changed at 73.64 yen from 73.78 yen last week and slipped to 4.8447 Chinese yuan from 4.8553 yuan.

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