NZ dollar holds above 72 US cts as Fed outlook improves, Wall St pares losses

By Paul McBeth

Nov. 25 (BusinessWire) – The New Zealand dollar held above 72 U.S. cents as a slightly more upbeat Federal Reserve outlook helped pare losses on Wall Street.

Fed policymakers boosted most of their forecasts for the U.S. economy, according to minutes of the Federal Open Market Committee’s last meeting. The minutes were released after weaker than expected consumer spending data and an increase in the number of “problem” U.S. lenders eroded investors’ appetite for higher-yielding, or riskier, assets. The Volatility Index, known as Wall Street’s ‘fear gauge’, dropped 5% to 20.66.

“The U.S. economy’s trying to chug along but it’s struggling to grow,” said Imre Speizer, market strategist at Westpac Banking Corp. “The FOMC minutes were a tad more optimistic than what we’ve seen in Fed speak of late” and this helped the kiwi pare losses earlier in the session, he said.

The kiwi dollar rose to 72.56 U.S. cents from 72.47 cents yesterday and declined to 64.64 on the trade-weighted index, or TWI, a measure of the currency against a basket of five trading partners, from 64.72. It was little changed at 64.25 yen from 64.27 yen yesterday and edged lower to 48.46 euro cents from 48.60 cents. It slipped to 78.83 Australian cents from 79.01 cents and dropped to 43.74 pence from 43.87 pence.

Speizer said the currency may trade between 72 U.S. cents and 73 cents today after Wall Street ended its session unchanged and currency markets went “sideways.”

Business sentiment in Germany continued to improve according to the Ifo institute’s business climate index, and European industrial orders exceeded expectations.

New Zealand Finance Minister Bill English will appear before Parliament’s Finance and Expenditure Committee to discuss The Treasury’s figures for the three months through September, and may update the government’s perception of the economy.

(BusinessWire)

Gordon Campbell: On John Key’s Agenda For The Nation

There seemed to be three main components to John Key’s speech:

a) tax cuts largely paid for by a hike in GST
b) mining in national parks and on conservation land, while building more roads.
c) giving firms easier access to the r&d from Crown Research Institutes, so that business can continue to get the taxpayer to pick up the tab for the research that keeps them competitive.

After all, corporate welfare is always such a blessed thing – its only social welfare that corrodes enterprise and ambition. More>>