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

 


NZ dollar extends decline as Fed minutes hint at end to QE

NZ dollar extends decline as Fed minutes hint at quantitative easing exit; US jobs data looms

By Paul McBeth

Jan. 4 (BusinessDesk) - The New Zealand dollar extended its decline in local trading as investors rethought their expectations for American interest rates after minutes from the Federal Reserve's last monetary policy review showed some members want to stop printing money as early as this year.

The kiwi fell to 82.32 US cents at 5pm in Wellington from 82.89 cents at 8am and 83.21 cents yesterday. The trade-weighted index declined to 74.32 from 74.75 yesterday.

Investors sold off equities around the globe after the Federal Open Market Committee minutes showed some officials "thought that it would probably be appropriate to slow or to stop purchases well before the end of 2013." The kiwi dollar was one of the best performing currencies last year as efforts by central banks to prop up ailing economies through printing new money flooded markets and prompted investors to seek out countries that offering positive real interest rates.

The idea that US interest rates would stay lower for longer "was pretty well priced in, and it's starting to get questioned," said Mike Jones, currency strategist at Bank of New Zealand in Wellington. "There's probably a bit more downside for the kiwi, Aussie and euro."

Jones said the currency will probably find buyers all the way down to 80 US cents as exporters look for cheaper entries for their hedging programmes.

The publication of the Fed's acknowledgment that it can't keep printing money forever comes ahead US non-farm payrolls figures, which are expected to show the unemployment rate stayed at a four-year low 7.7 percent, according to a Bloomberg survey of economists.

The US central bank is putting more emphasis on the labour market, saying it will keep the benchmark interest rate near zero until the jobless rate comes below 6.5 percent and two-year-ahead inflation projections stay below 2.5 percent.

The New Zealand dollar fell to 72.24 yen from 72.58 yen yesterday and declined to 78.90 Australian cents from 79.36 cents. It decreased to 63.19 euro cents from 63.33 cents, and was little changed at 51.23 British pence from 51.28 pence yesterday.

(BusinessDesk)

© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

Media: Julian Wilcox Leaves Māori TV

Māori Television has confirmed the resignation of Head of News and Production Julian Wilcox. Mr Maxwell acknowledged Mr Wilcox’s significant contribution to Māori Television since joining the organisation in 2004. More>>

ALSO:

Genetics: New Heat Tolerant Cow Developed

Hamilton, New Zealand-based Dairy Solutionz Ltd has led an expert genetics team to develop a new dairy cow breed conditioned to thrive in lower elevation tropical climates and achieve high milk production under heat stress. More>>

Fractals: Thousands More Business Cards Needed To Build Giant Sponge

New Zealand is taking part in a global event this weekend to build a Menger Sponge using 15 million business cards but local organisers say they are thousands of business cards short. More>>

Scoop Business: NZ Net Migration Rises To Annual Record In September

New Zealand’s annual net migration rose to a record in September, beating government forecasts, as the inflow was spurred by student arrivals from India and Kiwis returning home from Australia. More>>

ALSO:

Scoop Business: Fletcher To Close Its Christchurch Insulation Plant, Cut 29 Jobs

Fletcher Building, New Zealand’s largest listed company, will close its Christchurch insulation factory, as it consolidates its Tasman Insulations operations in a “highly competitive market”. More>>

ALSO:

Scoop Business: Novartis Adds Nine New Treatments Under Pharmac Deal

Novartis New Zealand, the local unit of the global pharmaceuticals firm, has added nine new treatments in a far-ranging agreement with government drug buying agency, Pharmac. More>>

ALSO:

Crown Accounts: English Wary On Tax Take, Could Threaten Surplus

Finance Minister Bill English is warning the tax take may come in below forecast in the current financial year, as figures released today confirm it was short by nearly $1 billion in the year to June 30 and English warned of the potential impact of slumping receipts from agricultural exports. More>>

ALSO:

Get More From Scoop

 
 
Standards New Zealand

Standards New Zealand

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