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


NZ dollar falls after Fed starts to slow its money printing

NZ dollar falls after Fed starts to slow its money printing programme

By Paul McBeth

Dec. 19 (BusinessDesk) - The New Zealand dollar fell after the Federal Reserve trimmed its asset purchase programme in the face of a recovering US economy, in the first step towards ending stimulus which has been debasing the greenback.

The kiwi fell to 81.80 US cents at 5pm in Wellington from 82.47 cents at 8:10am and 82.50 cents yesterday. The trade-weighted index declined to 77.51 from 77.78 yesterday.

The Fed will cut its monthly purchases of bonds and mortgage backed securities by US$10 billion to US$75 billion as the US labour market continues to improve, its first move away from a massive stimulus that’s seen interest rates cut to near zero in response to the 2008 global financial crisis and more than four years of quantitative easing. About a third of the market was picking the Fed to start scaling back its asset purchases at today’s meeting.

“If you get better data, tapering is going to be stronger and harder,” said Tim Kelleher, head of institutional FX sales NZ at ASB Institutional. “The over-riding factor is that the US dollar should strengthen.”

The Fed move overshadowed local gross domestic product figures showing faster economic growth than expected in the third quarter of 1.4 percent as the dairy sector recovered from last summer’s drought.

“The currency was lower despite the good GDP,” Kelleher said, who predicts the kiwi will head towards 80 US cents.

Government figures also showed New Zealand recorded its first trade surplus for a month of November since 1991 on increased Chinese demand for dairy products. Some of the data was inadvertently released on Statistics New Zealand’s website, prompting the early publishing time.

The New Zealand dollar was little changed at 59.89 euro cents at 5pm in Wellington from 59.90 cents yesterday, and sank to 49.96 British pence from 50.65 pence. The local currency traded at 85.03 yen from 84.98 yen yesterday and was almost unchanged at 91.61 Australian cents from 92.62 cents.


© Scoop Media

Business Headlines | Sci-Tech Headlines


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>>


Houses (& Tobacco) Lead Inflation: CPI Up 0.3% In March Quarter

The consumers price index (CPI) rose 0.3 percent in the March 2014 quarter, Statistics New Zealand said today. Higher tobacco and housing prices were partly countered by seasonally cheaper international air fares, vegetables, and package holidays. More>>


Notoriously Reliable Predictions: Budget To Show Rise In Full-Time Income To 2018: English

This year’s Budget will forecast wage increases through to 2018 amounting to a $10,500 a year increase in average full time earnings over six years to $62,200 a year, says Finance Minister Bill English in a speech urging voters not to “put all of this at risk” by changing the government. More>>


Prices Up, Volume Down: March NZ House Sales Drop 10% As Loan Curbs Bite

New Zealand house sales dropped 10 percent in March from a year earlier as the Reserve Bank’s restrictions on low-equity mortgages continue to weigh on sales of cheaper property. More>>


Scoop Business: Chorus To Appeal Copper Pricing Judgment

Chorus will appeal a High Court ruling upholding the Commerce Commission’s determination setting the regulated prices on the telecommunications network operator’s copper lines. More>>



Cars: Precautionary Recalls Announced For Toyota Vehicles

Toyota advises that a number of its New Zealand vehicles are affected by a series of precautionary global recalls. Toyota New Zealand General Manager Customer Services Spencer Morris stressed that the recalls are precautionary. More>>


'Gardening Club': Air Freight Cartel Nets Almost $12 Million In Penalties

The High Court in Auckland has today ordered Swiss company Kuehne + Nagel International AG to pay a penalty of $3.1 million plus costs for breaches of the Commerce Act. Kuehne + Nagel’s penalty brings the total penalties ordered in this case to $11.95 million ... More>>


Crown Accounts: Revenue Below Projections

Core Crown tax revenue has increased by $1.9 billion (or 5.0%) compared to the same time last year. However this was $1.1 billion less than expected and is reflected across most tax types, continuing the pattern of recent months. More>>


Get More From Scoop

Computer Power Plus
Search Scoop  
Powered by Vodafone
NZ independent news