NZ dollar hold below 73 US cts as investors shrug off US govt shutdown

Monday 22nd January 2018

The New Zealand dollar held below 73 US cents at the local open as investors largely shrugged off Washington legislators' inability to reach a deal and avoid a shutdown of Federal government services.

The kiwi traded at 72.81 US cents as at 8am in Wellington from 72.75 cents on Friday in New York, down from 73.08 cents last week. The trade-weighted index was at 74.80 from 74.77 last week.

US legislators in the Senate failed to reach an agreement over immigration policy over the weekend, missing a deadline to extend funding for the Federal government. However, investors largely ignored the political stalemate as stocks on Wall Street closed at new records on optimism over company earnings. US politics will continue to attract attention throughout, with the shutdown creating uncertainty as to whether US President Donald Trump will attend the World Economic Forum in Davos, Switzerland this week.

"The US political impasse looks set to dominate market attention early this week, and is hardly a reason to buy USD," ANZ Bank New Zeland chief economist Sharon Zollner said in a note. "It is likely to result in plenty of noise but no dramatic shifts in trends, in our view. Nevertheless, the NZD looked a little toppy above 73 cents."

Local markets are expected to be quiet with some participants away for the Wellington Anniversary holiday and no data scheduled for release. Fourth quarter inflation data on Thursday is the key domestic event this week.

The kiwi edged up to 91.08 Australian cents from 90.97 cents on Friday in New York and increased to 4.6591 Chinese yuan from 4.6553 yuan. It traded at 80.54 yen from 80.58 yen last week and was almost unchanged at 52.42 British pence from 52.45 pence. The kiwi traded at 59.33 euro cents from 59.29 cents last week.

(BusinessDesk)

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