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NZ dollar falls on US tax reform plans

NZ dollar falls on US tax reform plans

WELLINGTON: The New Zealand dollar fell as US Republicans signalled progress on tax reforms and as financial markets awaited US inflation figures tonight and, for New Zealand, the latest opinion poll.

The kiwi dollar declined to 72.37 US cents as at 8am in Wellington from 72.87 cents late yesterday. The trade-weighted index fell to 75.51 from 75.78. Figures overnight showed US producer prices for final demand rose 0.2 percent in August after a 0.1 percent drop in July. The data comes ahead of the consumers price index for August, which is expected to show inflation accelerated to 0.3 percent from 0.1 percent the previous month. Meanwhile, House Ways and Means Committee chairman Kevin Brady flagged the release of a consensus document on tax reforms, a move seen as supportive for the greenback. In New Zealand, the latest 1News Colmar Brunton poll is due out later today. “Firming USD sentiment, together with a bit of exhaustion on the part of the NZD, has seen kiwi drop back to around where it was prior to Tuesday night’s political poll that caused all the fireworks,” said Sharon Zollner, senior economist at ANZ Bank New Zealand. “However, there could still be more fireworks to come, with it likely that another poll is out this evening, followed by US CPI figures tonight.”

The Colmar Brunton poll will be keenly watched because it was the same poll last week that surprised markets by putting Labour ahead on 43 percent to National’s 39 percent. That was reversed in this week’s Newshub Reid Research poll, which put National on 47.3 percent to Labour’s 37.8 percent. Ahead of the poll, the ANZ consumer confidence survey for September is due for release. The kiwi fell to 90.63 Australian cents from 90.80 Australian cents late yesterday. It declined to 80.01 yen from 80.26 yen and fell to 4.7330 yuan from 4.7543 yuan. The kiwi traded at 60.89 euro cents from 60.81 cents and traded at 54.80 British pence from 54.76 pence.