Kiwi dollar up on talk of Trump's new Fed chair

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NZN

The New Zealand dollar gained today on reports that US President Donald Trump has selected Jerome Powell as the next chair of the US Federal Reserve although traders say the bounce may be short-lived.

New Zealand currency fifty dollar note money

New Zealand currency fifty, dollar note (file picture).

Source: istock.com

The kiwi rose to US69.22c as at 5pm from US68.83c as at 8am in Wellington and 69.08c late yesterday.

The US dollar eased in Asia after news reports the White House plans to nominate current Fed Governor Jerome Powell as the next chair when Janet Yellen's term expires in February.

A formal announcement is expected later in the global trading day.

According to Bloomberg, in Mr Powell, he'll select a former private-equity executive who favours continuing gradual interest-rate increases and sympathises with White House calls to ease financial regulations.

"That's being interpreted in this part of the world as being a little bit dovish for markets,'' said Martin Rudings, senior dealer foreign exchange at OMF in Wellington.

''But I don't think that detracts from where the US economy is so it wouldn't surprise me if we have a bit of a retracement of this USD weakness."

Investors will be watching for any tax announcements from Mr Trump but the big number for the week will be the US payrolls data, said Mr Rudings.

Overall, the uncertainty still surrounding the New Zealand government and the likelihood of a stronger US dollar will keep the kiwi dollar capped, he said.

The Bank of England's rate decision and statement overnight will also be closely watched.

The kiwi was at 52.10 British pence from 52.03 pence and at 59.38 euro cents, unchanged from yesterday. It traded at A89.59c from 90.10c and at 4.5664 yuan from 4.5750 yuan. It was at 78.80 yen from 78.64 yen.

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