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

 


NZ dollar falls ahead of Reserve Bank interest rate decision

NZ dollar falls ahead of Reserve Bank interest rate decision today, investors eyeing outlook

By Tina Morrison

Dec 12 (BusinessDesk) – The New Zealand dollar declined ahead of the Reserve Bank decision on interest rates today where investors will be eyeing signals for when hikes may start next year.

The kiwi slipped to 82.36 US cents at 8am in Wellington, from 82.78 cents at 5pm yesterday. The trade-weighted index weakened to 77.21 from 77.53.

Reserve Bank governor Graeme Wheeler is expected to keep the official cash rate at 2.5 percent at his last monetary policy statement of the year at 9am today, while he balances the need for future hikes to stave off the threat of inflation against attracting investors to an already strong currency. Traders will then look ahead to next week’s Federal Reserve Open Market Committee meeting for indications of when the US central bank plans to pull back on its stimulus programme.

“The RBNZ will be the main driver today with a market positioned for some guidance about when the 2014 rate hikes will start,” Carrick Lucas, strategist at ANZ New Zealand, said in a note. “Should we not receive any new information, the NZD will remain capped into the FOMC next week. Signs the RBNZ is considering January hikes would support NZD, whilst confirmation of March should leave the NZD unchanged.”

Traders have priced in 111 basis points of increases to New Zealand’s official cash rate over the coming year, according to the Overnight Index Swap curve, though Wheeler may have to trim his track for future hikes given the persistent strength of the currency after the Federal Reserve didn’t start unwinding its US$85 billion asset purchase programme in September. The quantitative easing has weakened the greenback by flooding the market with US dollars.

Investors will also be looking out for Australian employment figures at 1:30pm New Zealand time today as a gauge of how quickly the economy is slowing across the Tasman. The kiwi advanced to 90.77 Australian cents at 8am in Wellington from 90.62 cents at 5pm yesterday.

The New Zealand dollar slipped to 59.70 euro cents from 60.15 cents yesterday and dropped to 50.25 British pence from 50.33 pence. It weakened to 84.51 yen from 84.92 yen yesterday.

(BusinessDesk)

© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

Interest Rates: Wheeler Hikes OCR To 3% On Inflationary Pressures, Eyes Kiwi

Reserve Bank governor Graeme Wheeler lifted the official cash rate for the second time in as many months, saying non-tradable inflationary pressures were "becoming apparent" in an economy that’s picking up pace and he's watching the impact of a strong kiwi dollar on import prices. More>>

ALSO:

Scoop Business: Equity Crowd Funding Carries Risks, High Failure Rate

Equity crowd funding, which became legal in New Zealand this month, comes with a high risk of failure based on figures showing existing forays into social capital have a success rate of less than 50 percent, one new entrant says. More>>

ALSO:

Scoop Business: NZ Migration Rises To 11-Year High In March

The country gained a seasonally adjusted 3,800 net new migrants in March, the most since February 2003, said Statistics New Zealand. A net 400 people left for Australia in March, down from 600 in February, according to seasonally adjusted figures. More>>

ALSO:

Hugh Pavletich: New Zealand’s Bubble Economy Is Vulnerable

The recent Forbes e-edition article by Jesse Colombo assesses the New Zealand economy “ 12 Reasons Why New Zealand's Economic Bubble Will End In Disaster ”, seems to have created quite a stir, creating extensive media coverage in New Zealand. More>>

ALSO:

Thursday Market Close: Genesis Debut Sparks Energy Rally

New Zealand stock rose after shares in the partially privatised Genesis Energy soared as much as 18 percent in its debut listing on the NZX, buoying other listed energy companies in the process. Meridian Energy, MightyRiverPower, Contact Energy and TrustPower paced gains. More>>

ALSO:

Power Outages, Roads Close: Easter Storm Moving Down Country

The NZ Transport Agency says storm conditions at the start of the Easter break are making driving hazardous in Auckland and Northland and it advises people extreme care is needed on the regions’ state highways and roads... More>>

ALSO:

Get More From Scoop

 
 
Computer Power Plus
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news