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

 


NZ dollar may test 77 US cts as Asian stocks sink

NZ dollar may test 77 US cts as Asian stocks sink amid Chinese liquidity concerns

By Paul McBeth

June 25 (BusinessDesk) - The New Zealand dollar may fall below 77 US cents in European and US trading after fears over China’s banking sector sparked a sell-off in Asian stock markets, and prompted investors to ditch risk-sensitive currencies.

The kiwi declined to 77.16 US cents at 5pm in Wellington from 77.55 cents at 8am and 77.47 cents yesterday. The trade-weighted index fell to 72.79 from 73.21 yesterday.

Stocks across Asia fell as investors digest the impact of the People’s Bank of China tightening of banking liquidity fuelled concerns a cash crunch will sap growth in the world’s second biggest economy. China’s Shanghai Composite Index fell 3.8 percent in afternoon trading, while Japan’s Nikkei 225 index was down 1.8 percent, and Hong Kong’s Hang Seng Index dropped 1.4 percent.

The New Zealand and Australian economies are closely linked with China’s fortunes, with both countries exporting large quantities into the world’s most populous nation.

“As long as the China jitters linger, the kiwi’s going to suffer more than most,” said Mike Jones, currency strategist at Bank of New Zealand in Wellington. “The kiwi’s still consolidating in the 77 to 78 US cents range, but looks likely to test the bottom of that tonight.”

The local currency has shed about 4.1 percent against the greenback since Federal Reserve chairman Ben Bernanke said last week the central bank may start tapering its $85 billion a month asset purchase programme this year if the economic data continues to improve.

Jones said the downtrend in the local currency probably isn’t enough to push it below 75 US cents, and any turnaround in US data may spark a rally towards 80 cents.

The kiwi slipped to 83.47 Australian cents from 84.08 cents yesterday and dropped to 75.23 yen from 76.21 yen. The local currency weakened to 58.83 euro cents from 59.11 cents and declined to 49.98 British pence from 50.39 pence.

(BusinessDesk)

© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

Gongs Got: Canon Media Awards & NZ Radio Awards Happen

Radio NZ: RNZ website The Wireless, which is co-funded by NZ On Air, was named best website, while Toby Manhire and Toby Morris won the best opinion general writing section for their weekly column on rnz.co.nz and Tess McClure won the best junior feature writer section. More>>

ALSO:

Pre-Budget: Debt Focus Risks Losing Opportunity To Stoke Economy

The Treasury is likely to upgrade its forecasts for economic growth in Budget 2016 next week but Finance Minister Bill English has already signalled that more of his focus is on debt repayment than on fiscal stimulus or tax cuts... More>>

ALSO:

Fulton Hogan's Heroes: Managing Director Nick Miller Resigns

Fulton Hogan managing director Nick Miller will leave the privately owned construction company after seven years in charge. The Dunedin-based company has kicked off a search for a replacement, and Miller will stay on at the helm until March next year, or until a successor has been appointed and a transition period completed. More>>

ALSO:

Gordon Campbell: On Electricity, Executions, And Bob Dylan

The Electricity Authority has unveiled the final version of its pricing plan for electricity transmission. This will change the way transmission prices (which comprise about 10% of the average power bill) are computed, and will add hundreds of dollars a year to power bills for many ordinary consumers. More>>

ALSO:

Half Empty: Fonterra NZ, Australia Milk Collection Drops In Season

Fonterra Cooperative Group says milk collection is down in New Zealand and Australia, its two largest markets, in the first 11 months of the season during a period of weak dairy prices. More>>

ALSO:

Get More From Scoop

 
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news