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

 


NZ dollar plunges on report of low inflation

NZ dollar plunges on report of low inflation

Jan 18 (BusinessDesk) - The New Zealand dollar shed more than half a US cent on weaker than expected consumer price index (CPI) data on Friday.

The kiwi fell about 60 basis points to 83.46 US cents but recovered to be 83.54 cents at 5pm. That compared to 84.10 cents at 8am and 83.93 US cents at 5pm on Thursday.

The trigger was news that the CPI fell 0.2 percent in the December quarter when the market consensus was for a 0.1 percent rise.

"Financial markets seemed to react to the fact that annual inflation was outside the Reserve Bank of New Zealand's (RBNZ's) 1 to 3 percent target range for a second quarter," Westpac economists said.

The two-year swap rate fell three basis points to 2.79 percent.

The data confused the outlook for interest rates because the RBNZ had been expected to hold the official cash rate at 2.5 percent for most of this year before raising it. Weak inflation data raised the prospect of a rate cut.

"We view an official cash rate reduction as a risk scenario rather than a likelihood. The RBNZ's target is framed in terms of its inflation forecast, which will still be lingering close to 2 percent on average after today's CPI data," Westpac said.

Interest turned to offshore influences in the afternoon with the release of a slew of Chinese economic data.

The kiwi firmed on news that China's Gross domestic product increased by 7.8 percent in 2012, down from 9.3 percent in 2011 as the data also showed that the economy picked up pace in the last three months of the year.

The kiwi was at 79.42 Australian cents at 5pm, slightly down from the 79.86 cents at 5pm on Thursday.

It was at 75.18 yen from 74.11 yen at 5pm on Thursday, and was 62.41 euro from 63.19 euro and 52.27 British pence from 52.48 pence.

The trade-weighted index was at 75.25 from 75.40.

(BusinessDesk)

© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

Scoop Business: Spark, Voda And Telstra To Lay New Trans-Tasman Cable

Spark New Zealand and Vodafone, New Zealand’s two dominant telecommunications providers, in partnership with Australian provider Telstra, will spend US$70 million building a trans-Tasman submarine cable to bolster broadband traffic between the neighbouring countries and the rest of the world. More>>

ALSO:

Statistics: Current Account Deficit Widens

New Zealand's annual current account deficit was $6.1 billion (2.6 percent of GDP) for the year ended September 2014. This compares with a deficit of $5.8 billion (2.5 percent of GDP) for the year ended June 2014. More>>

ALSO:

Still In The Red: NZ Govt Shunts Out Surplus To 2016

The New Zealand government has pushed out its targeted return to surplus for a year as falling dairy prices and a low inflation environment has kept a lid on its rising tax take, but is still dangling a possible tax cut in 2017, the next election year and promising to try and achieve the surplus pledge on which it campaigned for election in September. More>>

ALSO:

Job Insecurity: Time For Jobs That Count In The Meat Industry

“Meat Workers face it all”, says Graham Cooke, Meat Workers Union National Secretary. “Seasonal work, dangerous jobs, casual and zero hours contracts, and increasing pressure on workers to join non-union individual agreements. More>>

ALSO:

Scoop Business: ComCom Charges Hawkins’ Finance Companies Over Debt Recovery

The Commerce Commission has filed criminal proceedings against two finance companies run by former 1980s high-flyer Allan Hawkins over their debt recovery practices. More>>

ALSO:

Science Media Centre: The Big Science Stories Of 2014

It was a dramatic year for science, one that witnessed a severe outbreak of Ebola in West Africa and an historic mission to land a space probe on a comet. On the home front... headlines with animal testing for 'legal highs', 1080 use to tackle increased pest numbers and court action over genetically modified organisms among the most-covered stories. More>>

ALSO:

Get More From Scoop

 
 
Standards New Zealand

Standards New Zealand
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news