Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search

 


NZ dollar falls on benign inflation, RBA outlook

NZ dollar falls on benign inflation, RBA outlook

By Paul McBeth

Oct. 16 (BusinessDesk) - The New Zealand dollar fell in local trading as a more benign than expected inflation report and a weaker Australian economic outlook trimmed the appeal of the currency.

The kiwi fell as low as 81.40 US cents and traded at 81.57 cents at 5pm in Wellington, down from 81.82 cents at 8am and up from 81.43 cents yesterday. The trade-weighted index was unchanged at 72.80.

New Zealand's 90-day bank bill rate fell 5 basis points to 2.65 percent and the two-year swap rate declined 7 basis points to 2.47 percent after consumer prices rose at a slower than expected pace of 0.3 percent in the September quarter. That took annual inflation to 0.8 percent, below the Reserve Bank's target band of between 1 percent and 3 percent. The data comes before new central bank governor Graeme Wheeler delivers his first official cash rate review next week.

The OCR review "is a real focus regardless of what inflation is doing right now - there are a whole lot of questions about the new governor and whether the new policy target agreement is something we should read a lot into," said Chris Tennent-Brown, FX economist at Commonwealth Bank of Australia in Sydney.

Minutes from the Reserve Bank of Australia's Oct. 2 meeting show the board sees an "increased likelihood of growth over the coming year being somewhat weaker than earlier forecast." Australia has been dealing with a slowdown in its resources industry, a sector that helped it avoid recession during the global financial crisis. The kiwi fell to 79.46 Australian cents from 79.81 cents yesterday.

Tennent-Brown said the main focus for the trans-Tasman currencies this week will be the dump of Chinese data on Oct. 18, which is expected to show slowing economic growth in the world's most populous nation.

CBA expects the Australasian currencies will end the year higher with their respective economies in better shape than Europe, which is dealing with a sovereign debt crisis, and the US, which faces massive austerity if policymakers can't address the so-called 'fiscal cliff' after next month's Presidential election.

With trading volatility at the lowest level since before the 2008 global financial crisis, "the fundamentals of the Australian and New Zealand dollars will keep flowing through and the currencies will stay strong," he said.

The rose to 64.28 yen from 63.87 yen yesterday and slipped to 62.92 euro cents from 63.08 cents. It was little changed at 50.76 British pence from 50.74 pence yesterday.

(BusinessDesk)

© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

Scoop Business: NZ Dollar Catches Breath After "Goldilocks" Slump

The New Zealand dollar edged up following its dramatic slump yesterday after the Reserve Bank confirmed speculation it intervened in the currency market last month and PM John Key suggested a “Goldilocks” level far lower than at present. More>>

ALSO:

Biosecurity: Kiwifruit Claim To Hold Officials Accountable For Psa

Kiwifruit growers have joined forces to hold Biosecurity NZ accountable in the courts for its negligence in allowing 2010’s Psa outbreak that devastated New Zealand’s kiwifruit industry and exports. Foundation claimants representing well ... More>>

ALSO:

Poison: Anglers Advised Not To Eat Trout In 1080 Areas

With the fishing season opening in just a few days (1 October 2014), anglers are being warned by the Department of Conservation(DOC) not to eat trout from pristine backcountry waters and their downstream catchments, where the department is conducting 1080 poisoning operations. More>>.

ALSO:

Quotas: MPI Swoop On Suspected Fraudulent Fishing Activity

Ministry for Primary Industries (MPI) compliance officers swooped on a Hawkes Bay fishing enterprise today to secure evidence in an investigation into suspected fraudulent activity... “The investigation involves activity throughout the commercial supply chain – catching, landing, processing and exporting.” More>>

ALSO:

Scoop Business: Fonterra Slashes 2015 Milk Payout, Earnings Tumble 76%

Fonterra Cooperative Group cut its forecast 2015 milk price payout by about 12 percent, citing weaker global dairy prices and said there is a risk of further declines given strong global milk production. More>>

ALSO:

Scoop Business: RBNZ Keeps OCR At 3.5%, Signals Slower Pace Of Future Hikes

Reserve Bank governor Graeme Wheeler kept the official cash rate at 3.5 percent and signalled he won’t be as aggressive with future rate hikes as previously thought as inflation remains tamer than expected. The kiwi dollar fell to a seven-month low. More>>

ALSO:

Weather: Dry Spells Take Hold In South Island

Many areas in the South Island are tracking towards record dry spells as relatively warm, dry weather that began in mid-August continues... for some South Island places, the current period of fine weather is quite rare. More>>

ALSO:

Get More From Scoop

 
 
Computer Power Plus

Standards New Zealand

Standards New Zealand

Mosh Social Media
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news