15 Oct 2013

Dollar, market still waiting on US news

7:11 pm on 15 October 2013

The New Zealand dollar is up slightly against the currencies of all major trading partners but market sentiment remains dominated by the American situation.

Westpac currency strategist Imre Speizer said market sentiment continued to be dominated by whether American politicians could reach an agreement to avoid the United States defaulting on its debt.

"They are cautiously optimistic a deal looms. However, the kiwi has been roughly ranging sideways over the last day," Mr Speizer said.

"It's really waiting for a result. You get small moves up and small moves down during the day, simply on headlines that a deal is imminent, and then a deal is off, and that tends to repeat itself, so really nothing more than headline watching on the fiscal front at the moment, and no resolution in sight but hopeful one is nearby."

Just after 5pm, the New Zealand dollar was buying: 83.89 US cents, 88 Australian cents, 52.45 pence, 0.6185 euro and 82.57 yen.

Shares up

The NZX Top 50 Index rose 14 points to 4748 in a market Woodward Partners institutional equities director Grant Taylor described as being "effectively on hold" while the United States situation was resolved.

"Obviously the outcome, should it be negative, would lead the market lower but for the meantime, everyone assumes that they will come to some sort of resolution," Mr Speizer said.

Xero continued to find favour with investors, hitting yet another record at $20.60 before ending the day at $20.58, up 88 cents. At that price, the market is valuing Xero, a company with annualised sales of about 70 million dollars, at $2.4 billion.

Sky TV shares rose 11 cents to $6.12 on the back of solid support out of Australia.

However, Mighty River Power shares fell 2 cents to $2.20, with investors positioning themselves ahead of the Meridian Float, Mr Speizer said.

Investors expected they would be "well looked after" by the float process, so they were freeing up capital to allow them to take up that opportunity, he said.