NZ Dollar Rises After Risk Appetite

(RTTNews) - The New Zealand dollar strengthened against other major currencies in the Asian session on Monday amid risk appetite among traders, following the broadly positive cues from Wall Street on Friday, on renewed optimism about the outlook for interest rates. Traders are also cautious and reluctant to make more significant moves ahead of the inauguration of U.S. President-elect Donald Trump amid speculations on the potential impact of his policies.

Adding to the interest rate optimism, U.S. Fed Governor Christopher Waller told CNBC the central bank could lower interest rates multiple times this year if inflation eases as he is expecting. Waller added that the number of rate cuts would be driven by the data, suggesting the Fed could cut rates three or four times if there is a lot of progress on inflation or cut rates twice or only once if inflation remains sticky.

Gains across most sectors led by iron ore miners and technology stocks, also led to the upturn of commodity linked NZD.

In economic news, the People's Bank of China maintained its interest rates for the third straight session, as policymakers await the stance of new US administration.

The PBoC left its one-year loan prime rate at 3.10 percent. Similarly, the five-year LPR, the benchmark for mortgage rates, was held at 3.60 percent. The decision matched expectations.

In the Asian trading today, the NZ dollar rose to 4-day highs of 1.8355 against the euro and 87.65 against the yen, from last week's closing quotes of 1.8387 and 87.22, respectively. If the kiwi extends its uptrend, it is likely to find resistance around 1.80 against the euro and 89.00 against the yen.

Against the U.S. and the Australian dollars, the kiwi edged up to 0.5615 and 1.1071 from Friday's closing quotes of 0.5580 and 1.1081, respectively. On the upside, 0.58 against the greenback and 1.09 against the aussie are seen as the next resistance levels for the kiwi.

Looking ahead, Eurostat publishes euro area construction output data for November at 5:00 am ET in the European session.

In the New York session, Bank of Canada Business Outlook Survey result is slated for release.