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


NZ dollar slips after positive US economic data

NZ dollar slips as positive US economic data points to continued tapering in 2014

By Tina Morrison

Jan. 3 (BusinessDesk) – The New Zealand dollar weakened after positive US economic data reinforced expectations a reviving US economy will prompt the Federal Reserve to continue to pull back its monetary stimulus this year.

The kiwi slipped to 81.99 US cents at 8am in Wellington, from 82.28 cents at 5pm yesterday.

The Fed announced last month that it would start pulling back its US$85 billion of monthly bond purchases this month as it gains confidence about a revival in the world’s largest economy. Supporting that view, reports yesterday showed a gauge of US factory activity held near a 2-1/2 year high, the number of Americans filing new claims for jobless benefits fell and construction spending hit its highest in nearly five years.

“It wasn’t stellar data but it just continues the trend,” said Stuart Ive, senior advisor at OMF. ”That broad US dollar strength is on the belief that tapering is going to continue.”

A Reuters poll of economists taken in mid-December forecast annualized first-quarter US economic growth of 2.5 percent, reaching 3 percent by year-end. But since then, economic data has tended to exceed forecasts, Reuters said.

Investors will closely watch a speech by Fed Chairman Ben Bernanke later today in Philadelphia for clues about the central bank’s plans for further easing of its monthly bond-buying programme. The Fed plans this month to reduce the pace of bond purchases by US$10 billion to US$75 billion.

Also on the agenda today, China releases its official PMI non-manufacturing report for December at 2pm. Traders will be eyeing the report for signs of how Asia’s largest economy is tracking. The previously monthly reading was 56, with a print above 50 indicating expansion.

The New Zealand dollar is benefiting from investors selling the euro and the sterling in favour of the kiwi and the Aussie, said OMF’s Ive.

The local currency advanced to 59.98 euro cents from 59.76 cents yesterday and rose to 49.98 British pence from 49.60 pence.

The kiwi weakened to 91.89 Australian cents from 92.17 cents yesterday and dropped to 85.81 yen from 86.62 yen. Japanese banks are closed today for a four-day bank holiday.


© Scoop Media

Business Headlines | Sci-Tech Headlines


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>>


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>>


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>>


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>>


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>>


Get More From Scoop

Computer Power Plus
Search Scoop  
Powered by Vodafone
NZ independent news