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

 


NZ Dollar Outlook: Kiwi may gain as acid goes on US recovery

NZ Dollar Outlook: Kiwi may gain as acid goes on US recovery after weak jobs figure

By Paul McBeth

Jan. 13 (BusinessDesk) - The New Zealand dollar may gain this week as investors tune into US economic indicators after a weak reading of the labour market on Friday sparked fears the Federal Reserve may stall plans to scale back its monetary stimulus, while New Zealand’s upbeat outlook is expected to be reaffirmed by local data.

The local currency may trade between 82 US cents and 84.30 cents this week, according to a BusinessDesk survey of nine traders and strategists. Eight predict the currency will gain, and one expects it to decline. The kiwi recently traded at 82.94 US cents from 82.99 cents at 8am in Wellington.

Weak jobs figures on Friday in Washington surprised investors who were looking for a faster recovery in the labour market, and prompted traders to reassess their expectations as to how quickly the Fed will pull back its monthly asset purchase programme. A slew of Fed officials are speaking this week, including outgoing chairman Ben Bernanke on Thursday in Washington, and will be watched for insight into the winding down its quantitative easing.

Freezing conditions in the US have been blamed for much of the weak employment market, and investors will be looking at the Fed’s beige book, the Philadelphia Fed survey and Empire manufacturing survey see how much of an impact the harsh winter has had on the world’s biggest economy.

At the same time, the New Zealand Institute of Economic Research’s quarterly survey of business opinion tomorrow is expected to show another upbeat assessment of the local economy, feeding into expectations the country’s recovery is gathering pace.

Sam Tuck, senior FX strategist at ANZ New Zealand in Auckland, said the kiwi will be supported by “potential for a strong QSBO and some more weather-related figures” from the US. He expects the currency will push up to the 84 US cents area, though stay within its long-term range.

US corporate earnings season will also capture traders’ attention, with investors looking for revenue growth rather than cost cutting measures, and any sign of strength may ease concerns stoked by the weak jobs report.

That’s one of the reasons why OMF senior adviser Stuart Ive has a negative bias for the kiwi this week, saying the employment report is one piece of data and is unlikely to hold up the Fed’s plans.

“Overall the kiwi may edge higher over time, but I find it hard to believe we’re going to break to the upside here,” Ive said. “I don’t think the numbers of Friday were enough to break out of the current range.”

Traders are waiting for next week’s fourth-quarter consumer price index ahead of the Reserve Bank’s first policy review on Jan. 31 to firm up their views on the pace of the local tightening cycle. Markets have priced in 116 basis points of increases to the 2.5 percent official cash rate over the coming 12 months, according to the Overnight Index Swap curve.

(BusinessDesk)

© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

Science: Hookworm Discovery At Malaghan Institute

Professor Graham Le Gros has led a team which has stimulated both innate and memory responses to the parasite, discovering along the way the unexpected behaviour of one particular immune cell, in Hookworm, one of the world’s most devastating tropical ... More>>

Business: Provinces Urged To Make Full Use Of New Air Services

Provincial New Zealand has been urged to use new air services to Auckland or risk losing them either partially or completely. The stark warning was issued today by Far North mayor John Carter at a ceremony at Kaitaia airport to mark the final Air ... More>>

Mobile: 2degrees To Credit All Calls And SMS To Nepal

In the wake of the devastating earthquake in Nepal in the weekend, 2degrees will be crediting all calls and SMS messages made to mobiles and landlines in Nepal from Friday 24th April until midnight Wednesday 29th April. More>>

Scoop Business: Alex Swney Pleads Guilty To $2.5M Fraud Charge

Alex Swney, former chief executive of the Auckland city centre business association Heart of the City, has pleaded guilty to dishonestly using documents to obtain $2.5 million. More>>

ALSO:

Petrol Burns Prices: Second Consecutive Quarterly Fall For CPI

The consumers price index (CPI) fell 0.3 percent in the March 2015 quarter, following a 0.2 percent fall in the December 2014 quarter, Statistics New Zealand said today. The last time the CPI showed two consecutive quarterly falls was in the December 1998 and March 1999 quarters. More>>

ALSO:

Scoop Business: NZ Broadcasters Launch Battle Against Global Mode ISPs

New Zealand broadcasters have confirmed they’ve launched legal proceedings against internet service providers who give customers’ access to “global mode”, which allows customers access to offshore online content, claiming it breaches the local content providers’ copyright. More>>

ALSO:

Sanford: Closure Of Christchurch Mussel Processing Plant Confirmed

The decision comes after a period of consultation with the 232 staff employed at the Riccarton site, who were told on 9 April that Sanford was considering the future of mussel processing in Christchurch. Recent weather patterns had impacted on natural spat (offspring) supply... More>>

ALSO:

Price Of Cheese: Dairy Product Prices Fall To The Lowest This Year

Dairy product prices fell in the latest GlobalDairyTrade auction, hitting the lowest level in the 2015 auctions so far, as prices for milk powder and butter slid amid concern about the outlook for commodities. More>>

ALSO:

Houston, We Have An Air Route: Air New Zealand To Fly Direct To The Heart Of Texas

Air New Zealand will fly its completely refitted Boeing 777-200 aircraft between Auckland and Houston up to five times a week opening up the state of Texas as well as popular nearby tourist states such as Louisiana and Florida. More>>

ALSO:

Get More From Scoop

 
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news