The New Zealand dollar was trading near a two-week high against its US counterpart after the end of the partial government shutdown there removed one potential risk in global markets.
The kiwi was trading at 68.37 US cents at 8:30am from 67.73 cents here last week and 68.37 cents in New York late Friday. The trade-weighted index rose to 73.90 from 73.52.
“Risk markets ended the week on a high, supported by positive earnings reports and headlines that an agreement has been reached to temporarily end the US government shutdown,” ANZ said in a client note.
While the fix is only temporary, “it is a monkey off the market’s back.”
US President Donald Trump ended the 35-day shutdown of parts of the federal government on Friday with an agreement to fund the government through to Feb.15. The backdown, without gaining any of the US$5.7 billion he had sought for a wall on the Mexico border, came as international flights started being affected by a lack of air traffic controllers.
BNZ said the size of the Chinese delegation joining Vice-Premier Liu He in Washington this week – up to 30 delegates, was also viewed positively. Further cash injections in China by the central bank through new term-lending facilities and a cut in banks’ reserve requirements, effective Friday, also helped.
The S&P 500 Index rose 0.9 percent, while the Dow Jones Industrial Average was up 0.8 percent.
ANZ says the main focus this week will be progress on the US-China trade talks and the Federal Open Market Committee meeting.
“We expect the Fed will be cautious, but not overly so, while signs of progress on trade would be positive for risk and may keep NZD supported.”
The New Zealand dollar was trading unchanged against the Australian dollar at 95.26 cents. It was at 51.84 British pence from 51.60 pence here on Friday, at 59.75 euro cents from 59.81, at 74.84 Japanese yen from 74.39, and at 4.6114 Chinese yuan from 4.5882.