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

 


NZ dollar sinks after Wheeler outlines intervention criteria

NZ dollar sinks after RBNZ's Wheeler outlines intervention criteria

By Paul McBeth

Feb. 20 (BusinessDesk) - The New Zealand dollar shed more than half a US cent after Reserve Bank governor Graeme Wheeler outlined the central bank's criteria to intervene in currency markets, and said he was prepared to act when those were met.

The kiwi fell to 84.04 US cents at 5pm in Wellington from 84.61 cents immediately before Wheeler's speech and down from 84.37 cents yesterday. The trade-weighted index dropped to 76.30 from 76.77 yesterday.

RBNZ's Wheeler told the New Zealand Manufacturers' and Exporters' Association the kiwi dollar is significantly over-valued, and he "will intervene when the circumstances are right." The RBNZ can intervene in currency markets when the kiwi is at exceptional levels that aren't justified, is consistent with monetary policy, and when it will work. It last intervened in mid-2007.

"I don't think they're looking at intervening now - it needs to be quite a bit higher," said Tim Kelleher, head of institutional FX sales NZ at ASB Institutional. "He'd be pretty proud of his work" in talking down the kiwi, Kelleher said.

Wheeler also reaffirmed the central bank's forecasts for the official cash rate to remain unchanged until next year, and said "a higher exchange rate relative to expectations will lead to a lower than expected OCR."

"The market priced in rate hikes quite aggressively and he basically said rates are on hold until the end of 2013," Kelleher said. He expects buyers to emerge at 83.50/83.80 US cents.

New Zealand's currency got a boost earlier today from a 3.1 percent across all dairy products sold on Fonterra Cooperative Group's online trading auction. That was just 12 hours after reports China's quarantine authority destroyed branded locally produced milk powder.

The New Zealand dollar fell to 54.41 British pence from 54.56 pence and declined to 62.66 euro cents from 63.22 cents. It dropped to 81.14 Australian cents from 81.72 cents, and decreased to 78.54 yen from 79.08 yen.

(BusinessDesk)

© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

Final Frontier: Rocket Lab And NASA Sign Commercial Space Launch Agreement

Rocket Lab has signed a Commercial Space Launch Act Agreement with the National Aeronautics and Space Administration (NASA). The agreement enables Rocket Lab to use NASA resources - including personnel, facilities and equipment - for launch and reentry efforts. More>>

ALSO:

Scoop Business: Wheeler Downplays Scope For ‘Large’ Rates Fall

Reserve Bank governor Graeme Wheeler says some market commentators are predicting further declines in interest rates that would only make sense for an economy in recession, although some easing is likely to be needed to maintain New Zealand’s economic growth. More>>

ALSO:

Ruataniwha Dam: Consent Conditions Could Mean Reduced Intensity

Legal advice sought by the Hawke’s Bay Regional Council on the Ruataniwha Dam consent conditions has confirmed that farmers who sign up to take water from the dam could be required to reduce the intensity of their farming operation to meet the catchment’s strict nitrogen limit. More>>

Health And Safety: Bill Now Sees Rules Relaxed For Small Businesses

Health and safety law reform sparked by the Pike River coalmine disaster has been reported back from the industrial relations select committee with weakened requirements on small businesses to appoint health and safety representatives and committees. More>>

ALSO:

Bearing Fruit: Annual Fruit Exports Hit $2 Billion For First Time

The value of fruit exported rose 20 percent (up $330 million) for the June 2015 year when compared with the year ended June 2014. Both higher prices and a greater quantity of exports (up 9.0 percent) contributed to the overall rise. More>>

ALSO:

Get More From Scoop

 
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news