Kiwi dollar drops as Trump pumps strong greenback

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The New Zealand dollar has fallen almost half a US cent after US President Donald Trump said he wanted to see a "strong" greenback and that comments by his Treasury secretary earlier this week were misinterpreted.

A mixture of New Zealand Bank notes and coins.

New Zealand currency (file picture).

Source: istock.com

The kiwi dropped to US73.32 cents as at 8.25am today in Wellington from US73.72c immediately before Trump's comments, and down from US73.82c on Thursday. The trade-weighted index declined to 74.71 from 75.02 yesterday.

The Dollar Index, a measure of the greenback against a basket of currencies, gained after Trump told CNBC the world's reserve currency will appreciate under his leadership, saying "the dollar is going to get stronger and stronger, and ultimately I want to see a strong dollar".

The greenback dropped sharply on Thursday when Treasury Secretary Steven Mnuchin said a weaker greenback was good for trade, comments Trump said were taken out of context. The US president is scheduled to deliver a speech at the World Economic Forum in Davos, Switzerland.

"The initial move we've seen this morning is due to those dollar comments by Trump and gives us that little nudge back down," said Stuart Ive, senior dealer foreign exchange at OMF.
"The kiwi looks pretty well-capped at 74.40 (US cents) on the upside."

No local data is scheduled on Friday and Australian markets are closed for the Australia Day holiday, which Ive said left investors watching for more comments at the World Economic Forum and awaiting US economic data overnight.

On Friday morning, the kiwi fell to 59.11 euro cents from 59.36c, was little changed at 91.21 Australian cents from A91.18c and fell to 4.6330 Chinese yuan from 4.6702 yuan. It gained to 51.81 British pence from 51.65p and fell to 80.19 yen from 80.48 yen.

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