Kiwi hits week high against yen

Kiwi hits week high against yen

The New Zealand dollar rose to a week high against the yen as investors favour higher risk assets on optimism a political impasse that could have forced the US into debt default may be edging towards a compromise.



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THE kiwi was trading at 81.33 yen at 8am on Friday in Wellington from 80.67 yen at the 5pm market close on Thursday. The local currency rose to US82.88 cents from US82.58c.

The trade-weighted index rose to 76.98 from 76.79.

Optimism is rising that the US Congress may reach a deal to avert a US debt default on October 17 after Republicans said they would propose legislation for a short-term debt limit increase.

“There’s some optimism that the deal is going to go through so it is a risk on move and a lot of people fund themselves by borrowing in yen and investing in the kiwi, so that’s why the kiwi ends up,” said ASB head of institutional FX sales Tim Kelleher.

“It’s the yen crosses more than anything else that were higher.”

In New Zealand on Friday, a report on food prices for September is scheduled for release at 10:45am and a Reserve Bank report on non-resident bond holdings for September is due out at 3pm.

On Friday morning, the kiwi slipped to 87.61 Australian cents at 8am in Wellington from 87.74 cents on Thursday after a report showed the Australian unemployment rate unexpectedly dropped to 5.6 per cent from 5.8 per cent.

It edged up to 51.87 British pence from 51.83 pence after the Bank of England kept monetary policy unchanged and rose to 61.22 euro cents from 61.15 cents.