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

 

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:

Auckland Outage: Power Mostly Restored Overnight

Vector wishes to advise that all but 324 customers have been restored overnight. These customers are spread throughout the network in small pockets. The main St Johns feeder was restored around midnight allowing most of the customers in all affected areas to have power this morning. More>>

ALSO:

Half Empty: Dairy Prices Drop To Lowest Since August 2009

Dairy product prices fell to the lowest level in more than five years in the latest GlobalDairyTrade auction, led by declines in butter milk powder and whole milk powder. More>>

ALSO:

Get More From Scoop

 
 
Standards New Zealand

Standards New Zealand

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