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

 


NZ dollar gains after weak US data weighs on tapering

NZ dollar gains after weak US data weighs on tapering expectations

By Tina Morrison

Jan. 7 (BusinessDesk) – The New Zealand dollar advanced after weaker-than-expected economic data in the US tempered expectations over how fast the Federal Reserve may start unwinding its monetary stimulus programme.

The kiwi rose to 83 US cents at 8am in Wellington, from 82.56 cents at 5pm yesterday. The trade-weighted index increased to 78.41 from 78.14 yesterday.

The US dollar index, which measures the greenback against a basket of currencies, dropped after the Institute of Supply Management report showed the pace of growth in the US services sector slowed for a second month in December with business activity expanding at a lower rate and new orders contracting. That may weigh on expectations for how fast the Fed will taper its bond-buying programme which will this month be reduced by US$10 billion to US$75 billion.

“The USD was generally weaker overnight as the ISM non-manufacturing survey declined,” David Croy, head of markets research for ANZ Bank New Zealand, said in a note. “Fed tapering is ‘in the bag’ but how quickly quantitative easing is eventually unwound does depend on how the US economy evolves.”

The Institute for Supply Management said its services index fell to 53 last month from 53.9 in November, below expectations in a Reuters poll for a reading of 54.5 and the lowest reading since June. The gauge of business activity dipped to 55.2 from 55.5 and the read on new orders contracted to 49.4 from 56.4, however the employment gauge rose to 55.8 from 52.5.

The employment reading bodes well for US non-farm payrolls data on Friday, which is a key focus for the Fed, Croy said.

The kiwi is likely to trade between 82.60 US cents and 83.50 cents today, he said.

With no data scheduled on the New Zealand calendar today, traders will be keeping an eye on Australian trade data for November, scheduled for release at 1:30pm New Zealand time.

The New Zealand dollar touched a two-week high of 92.64 Australian cents early this morning, and was trading at 92.48 cents at 8am from 92.26 cents at 5pm yesterday.

The kiwi is likely to trade between 92.10 Australian cents and 92.90 cents today, Croy said.

The local currency advanced to 60.82 euro cents from 60.77 cents yesterday ahead of a report on December inflation today leading into the European Central Bank meeting on Thursday. The kiwi increased to 50.55 British pence from 50.45 pence yesterday and rose to 86.46 yen from 86.18 yen.

(BusinessDesk)

© 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>>

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:

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>>

ALSO:

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>>

ALSO:

Get More From Scoop

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