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NZD edges up amid bets on stronger kiwi

NZ Newswire logoNZ Newswire 25/06/2017 Jonathan Underhill
New Zealand coin is arranged for a photograph in Wellington, New Zealand © Mark Coote New Zealand coin is arranged for a photograph in Wellington, New Zealand

The New Zealand dollar edged up in New York trading on Friday as data emerged showing traders have been increasing their bets on a strong kiwi, a situation that may actually leave the currency more vulnerable to a correction.

The kiwi was trading at US72.80c as at 8am in Wellington from US72.84c in New York on Friday and from US72.67c in Asia last week.

The trade-weighted index was at 78.49, little changed from last week.

US Commodity Futures Trading Commission data shows that after traders had been betting against the kiwi, taking "short" positions, they now held the highest net speculative "long" NZ dollar positions in more than four years.

ANZ Bank New Zealand said long positions increased the week before last by US$3.8 billion.

"While New Zealand's economic credentials demand respect, that build-up in itself leaves us wary of a correction lower," ANZ Bank New Zealand chief economist Cameron Bagrie said in a note.

He said the kiwi would meet resistance should it rise as high as US73.20c.

The week ahead brings merchandise trade on Tuesday and both May building consents and business confidence on Friday, which will provide an update on how the domestic economy may be faring.

Globally, investors are awaiting a US Federal Reserve chair Janet Yellen speech in London on Tuesday, where the topic is global economic issues and where they will be listening for any hint of a third US rate hike this year.

The kiwi traded at 57.15 British pence from 57.26 pence on Friday in New York and traded at 80.94 yen from 81 yen.

It fell to 4.9755 yuan from 4.9769 yuan and traded at 64.99 euro cents from 65.09 cents.

The kiwi dollar rose to A96.18c from A96.10c in New York on Friday.

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