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

 

Must Sell 20 Petrol Stations: Z Cleared To Buy Caltex Assets

Z Energy is allowed to buy the Caltex and Challenge! petrol station chains but must sell 19 of its retail sites and one truck-stop, the Commerce Commission has ruled in a split decision that acknowledges possible retail price coordination between fuel retailers occurs in some regions. More>>

ALSO:

Huntly: Genesis Extends Life Of Coal-Fuelled Power Station To 2022

Genesis Energy will keep its two coal and gas-fired units at Huntly Power Station operating until 2022, having previously said they'd be closed by 2018, after wringing a high price from other electricity generators who wanted to keep them as back-up. More>>

ALSO:

Dammed If You Do: Ruataniwha Irrigation Scheme Hits Farmer Uptake Targets

Enough Hawke's Bay farmers have signed up for water from the proposed Ruataniwha Water Storage Scheme for it to go ahead as long as a cornerstone institutional capital investor can be found to back it, its regional council promoter announced. More>>

ALSO:

Reserve Bank: OCR Stays At 2.25%

Reserve Bank governor Graeme Wheeler kept the official cash rate at 2.25 percent, in a decision traders had said could go either way, while predicting inflation will pick up as the slump in oil prices washes out of the data and capacity pressures start to build in the economy. More>>

ALSO:

Export Values Down: NZ Posts Biggest Annual Trade Deficit In 7 Years

New Zealand has recorded its biggest annual trade deficit since April 2009, reflecting weaker prices of agricultural commodities such as dairy products, beef and lamb, and increased imports of vehicles and machinery. More>>

ALSO:

Currency Events: NZ's New $5 Note Wins International Banknote Award

New Zealand’s new Brighter Money $5 note has been named Banknote of the Year in a prestigious international competition. The $5 note was awarded the IBNS Banknote of the Year title at the International Bank Note Society’s annual meeting. More>>

ALSO:

Get More From Scoop

 
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news