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

 


NZ dollar drops to six-day low as greenback strengthens

NZ dollar drops to six-day low as greenback strengthens on optimism about US economy, tapering

By Tina Morrison

Jan. 9 (BusinessDesk) – The New Zealand dollar dropped to a six-day low in the face of a stronger greenback following a better-than-expected employment report and after confirmation in the Federal Reserve minutes of its last meeting that it plans to continue tapering.

The kiwi slid as low as 82.47 US cents following the 8am release of the Fed minutes from its meeting last month. The local currency was at 82.86 cents immediately before the 8am release from 82.88 cents at 5pm yesterday.

The US dollar index, which measures the greenback against a basket of currencies, extended gains after the Fed minutes allayed fears there may have been dissent amongst officials about plans announced at the last meeting to pull back the central bank’s US$85 billion a month bond buying programme. Investors, buoyed by the earlier release of upbeat ADP employment data, then bought the greenback with more confidence.

“The markets were worried that there might be further conditionality and dissent in those minutes, but there wasn’t”, said Sam Tuck, senior FX strategist at ANZ New Zealand. “What we saw after that was a delayed reaction to the stronger ADP number.

“People had been putting off buying US dollars while those minutes were coming for fear that the minutes would negate some of the positive impact from the ADP and now that the minutes are in line with expectations and people can assume that the Fed, provided the US data continues on trend, will continue to taper, then they are more comfortable acting on the stronger data that occurred earlier in the night.”

The ADP Research Institute report showed US employers added 238,000 payrolls in December, the biggest monthly gain since November 2012 and ahead of expectations for an increase of 200,000.

That buoyed expectations for tomorrow’s release of the key US non-farm payrolls report, which is closely watched by the Fed.

“There’s an expectation that tomorrow’s non-farm payrolls release will be strong and show continued growth in the US economy,” said ANZ’s Tuck.

Today, the Bank of England the European Central Bank are expected to keep interest rates unchanged, although traders will be looking for the ECB to offer some hints of other measures it may take to further stimulate the region’s economy, Kymberly Martin, markets strategist at Bank of New Zealand, said in a note.

The New Zealand dollar pared gains against other currencies following the 8am release of the Fed minutes.

The kiwi dropped to 92.69 Australian cents at 9am in Wellington, from 92.88 cents at 5pm yesterday, fell to 60.80 euro cents from 60.83 cents, slipped to 50.19 British pence from 50.53 pence and weakened to 86.54 yen from 86.93 yen.

The trade-weighted index declined to 78.29 at 9am from 78.50 at 5pm yesterday.

(BusinessDesk)

© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

Scoop Business: RBNZ Keeps OCR At 3.5%, Signals Slower Pace Of Future Hikes

Reserve Bank governor Graeme Wheeler kept the official cash rate at 3.5 percent and signalled he won’t be as aggressive with future rate hikes as previously thought as inflation remains tamer than expected. The kiwi dollar fell to a seven-month low. More>>

ALSO:

Weather: Dry Spells Take Hold In South Island

Many areas in the South Island are tracking towards record dry spells as relatively warm, dry weather that began in mid-August continues... for some South Island places, the current period of fine weather is quite rare. More>>

ALSO:

Scoop Business: Productivity Commission To Look At Housing Land Supply

The Productivity Commission is to expand on its housing affordability report with an investigation into improving land supply and development capacity, particularly in areas with strong population growth. More>>

ALSO:

Forestry: Man Charged After 2013 Death

Levin Police have arrested and charged a man with manslaughter in relation to the death of Lincoln Kidd who was killed during a tree felling operation on 19 December 2013. More>>

ALSO:

Smells Like Justice: Dairy Company Fined Over Odour

Dairy company fined over odour Dairy supply company Open Country Dairy Limited has been convicted and fined more than $35,000 for discharging objectionable odour from its Waharoa factory at the time of last year’s ”spring flush” when milk supply was high. More>>

Scoop Business: Dairy Product Prices Decline To Lowest Since July 2012

Dairy product prices dropped to the lowest level since July 2012 in the latest GlobalDairyTrade auction, led by a slump in rennet casein and butter milk powder. More>>

ALSO:

SOE Results: TVNZ Lifts Annual Profit 25% On Flat Ad Revenue, Quits Igloo

Television New Zealand, the state-owned broadcaster, lifted annual profit 25 percent, ahead of forecast and despite a dip in advertising revenue, while quitting its stake in the pay-TV Igloo joint venture with Sky Network Television. More>>

ALSO:

Get More From Scoop

 
 
Computer Power Plus

Standards New Zealand

Standards New Zealand
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news