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NZ dollar up on global risk appetite

NZ Newswire logoNZ Newswire 29/06/2017

The Kiwi dollar © Getty Images The Kiwi dollar The New Zealand dollar rose on Thursday on improving global risk appetite.

This came after hawkish comments from a raft of central banks and after all major US financial institutions received approval from the Federal Reserve to ramp up dividend payouts and share buybacks.

The kiwi traded at US73.18c as at 5pm from US73.09c as at 8am and from 72.76c Wednesday.

"Banking stocks are on a tear after the US banks passed their stress tests and after the bell today they all announced buybacks and special dividends. The world is a happy place and there's been some good risk appetite across the board," said Tim Kelleher, head of institutional foreign exchange sales at ASB Bank.

Reuters reported that the Federal Reserve approved plans from the 34 largest US banks to use extra capital for stock buybacks, dividends and other purposes beyond being a cushion against catastrophe.

On Wednesday, the Fed said those lenders, including household names like JPMorgan Chase & Co and Bank of America, had passed the second, tougher part of its annual stress test, Reuters said.

Mr Kelleher said he wasn't surprised to see both the New Zealand dollar and the Australian dollar rise after Bank of England governor Mark Carney signalled it may be necessary to remove some of the bank's monetary stimulus, suggesting interest rates could be raised.

Policymakers at the Bank of Canada suggested they might move to tighten rates as early as July.

''The market is now questioning whether the RBA and the RBNZ might have to go as well," he said.

The kiwi fell against the British pound from 56.50 British pence as at 8am in Wellington and from 56.77 pence Wednesday.

The kiwi was trading at 64.15 euro cents from 64.11c.

The local currency slipped to A95.52c from 95.72c and rose to 82.10 yen from 81.59 yen. The kiwi gained to 4.9588 yuan from 4.9487 yuan.

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