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

 


NZ dollar weakens after Fed ‘tapering’ announcement

NZ dollar weakens after Fed ‘tapering’ announcement and strong local data

By Tina Morrison

Dec. 20 (BusinessDesk) – The New Zealand dollar weakened following a volatile day after the Federal Reserve said it would start tapering its asset purchase programme while local data continued to point to a strengthening economy which will push up interest rates next year.

The kiwi slipped to 81.73 US cents at 8am in Wellington, from 81.81 cents at 5pm yesterday and has traded in a 1 cent range over the past 24 hours. The trade-weighted index dropped to 77.38 from 77.50 yesterday.

The Fed said it will begin a modest US$10 billion wind down of its US$85 billion a month bond-buying programme next month although it signalled it would likely keep the key interest rate near zero for longer. As the market weighed the implications of immediate ‘tapering’ but a later start to ‘tightening’, New Zealand’s better than expected third quarter gross domestic product figures were released.

“Yesterday’s events confirmed key two messages,” Kymberly Martin, strategist at Bank of New Zealand, said in a note. “First, the process of US Fed ‘tapering’ is not necessarily the death knell for the New Zealand dollar. Second, strong domestic data delivery is no longer sufficient to push the New Zealand dollar to greater heights.”

BNZ’s Martin said the New Zealand dollar is unlikely to return to its peaks against the greenback but will continue to be supported in the near term and is likely to trade above 80 US cents for much of the first half of 2014.

In New Zealand today, data is due on net migration and credit card billings.

Currency markets today may be driven by investors pulling back higher risk bets on currency positions ahead of the holiday season, David Croy, head of markets research at ANZ Bank New Zealand, said in a note. Croy expects the New Zealand dollar to remain strong over the period.

The New Zealand dollar slipped to 92.27 Australian cents at 8am in Wellington from 92.57 cents at 5pm yesterday and weakened to 59.83 euro cents from 59.88 cents after data showed the euro zone current account surplus hit a record high in October.

The local currency decreased to 49.88 British pence from 49.95 pence yesterday ahead of reports today on UK consumer confidence, the current account and the final reading of third quarter GDP.

The kiwi advanced to 85.14 yen from 85.02 yen ahead of the Bank of Japan meeting today where no policy changes are expected.

(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