Kiwi, stocks bounce back from Fed scare

The kiwi rose for a fourth day to trade at 70.71 US cents at 3pm in Wellington from 70.50 cents yesterday and 70.05 cents last week, while the S&P/NZX 50 Index advanced 39.2 points, or 0.3% to 12,626.09, up about 0.6% from last week.

Equity markets and risk-sensitive currencies such as the kiwi were sold off sharply last week when stronger than expected US inflation stoked expectations the Fed will launch into hiking interest rates sooner than expected. Fed chair Jerome Powell played down those inflationary fears, taking some of the steam out of the greenback and breathing life back into equity markets.

“We got a big fright last week which pushed up the US dollar,” said Imre Speizer, head of NZ strategy at Westpac. Things quietened down this week and the kiwi bounced back, he said.

Turnover on the wider market was $161.1 million, with 93 of the 186 securities on the main board gaining.