NZ dollar rises on positive sentiment in US share markets

The kiwi was trading at 66.74 US cents at 5pm. Photo / 123RF

The New Zealand dollar rose in line with gains in United States equities futures as sentiment remained positive ahead of a rash of earnings reports and the Federal Reserve's latest monetary policy meeting.

The kiwi was trading at 66.74 US cents at 5pm in Wellington from 66.43 cents in New York on Friday. The trade-weighted index was at 72.76 from 72.53 on Friday.

"The primary driver is whatever is driving equities," said Imre Speizer, currency strategist at Westpac.

With sentiment remaining relentlessly upbeat, the flightless bird is likely to climb higher, Speizer said.

While the spread of Covid-19 in the US remains grim – it accounts for more than a quarter of the world's reported infections and about 23 per cent of the deaths – the NZ news remains positive with the only new cases for weeks being those arriving in the country and subject to quarantine.

"We're not as badly off as others on the Covid front so the kiwi remains in favour," Speizer said.

NZ's economic data also continues to point to a recovery in motion.

Some minor data from China may have boosted sentiment. It showed industrial profits rose 11.5 per cent in June from the same month a year earlier, up from the 5.5 per cent rise in May, with the Covid crisis looking to be well behind the country where it originated, at least for now.

"I don't usually see that one as being a market mover," he said.

The market remains alert for news of further deterioration in US-China relations but there have been no developments since last week's closures of a Chinese consulate in Houston and a tit-for-tat US consulate in Chengdu.

The kiwi traded at 93.55 Australian cents from 93.48 cents on Friday, at 70.47 yen from 70.46 yen, 57.01 euro cents from 57.09 cents, 51.99 British pence from 52 pence, and 4.6717 Chinese yuan from 4.6486 yuan.

The bid-price on the two-year swap rate was at 0.1800 per cent from 0.2000 per cent on Friday while the 10-year swap was at 0.6500 per cent from 0.6750 per cent.