NZ dollar falls

New Zealand dollarThe New Zealand dollar has fallen against a broadly stronger greenback after the US Senate approved tax reforms that analysts say could boost the world’s biggest economy by 0.3 per cent next year.

The kiwi traded at US68.43 cents as at 0800 on Tuesday in Wellington from US68.59c late Monday. The trade-weighted index was at 72.24 from 72.38.

Tax cuts are expected to stoke a US economy that’s already travelling at a fast enough pace to give the Federal Reserve reason to hike interest rates again this month. The Senate now has to align the legislation with a version of the reforms already approved by the House of Representatives before it heads back to President Donald Trump for final sign-off.

Optimism about tax cuts has helped offset negative sentiment from the ongoing probe into contact between Trump’s campaign team and Russian diplomats and the president’s tweets critical of the FBI.

“With markets deciding to focus on the positive boost to growth from US tax reform and ignore other political rumblings the NZD/USD could see support tested,” said ANZ rural economist Con Williams.

On Tuesday morning, the kiwi was at 90.10 Australia cents from A90.18c. It fell to 50.78 British pence from 50.90p even after the pound fell on a trade-weighted basis after European Commission president Jean-Claude Juncker and British PM Theresa May failed to reach accord on a Brexit deal.

The New Zealand dollar traded at 57.75 euro cents from 57.78c fell to 77.13 yen from 77.31 yen and declined to 4.5290 yuan from 4.5352 yuan.

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