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

 


NZ dollar extends decline after Fed continues tapering

NZ dollar extends decline after Fed continues tapering, ahead of RBNZ interest rate decision

By Tina Morrison

Jan 30 (BusinessDesk) – The New Zealand dollar extended its decline after the Federal Reserve announced plans to continue to wind back its monetary stimulus despite volatility in emerging markets. The decision comes just one hour before New Zealand’s central bank reviews interest rates.

The kiwi slipped to 82.38 US cents at 8:20am from 82.75 cents immediately before the 8am announcement and 82.81 cents at 5pm yesterday. The trade-weighted index slipped to 77.95 from 78.38 yesterday.

The Fed said it would reduce its monthly bond purchase programme next month by a further US$10 billion to US$65 billion as expected, after trimming the programme by the same amount this month. The withdrawal of stimulus has contributed to turmoil in emerging markets as investors pull their funds out. The announcement comes ahead of a decision by New Zealand’s Reserve Bank on interest rates at 9am, with most economists expecting no change.

“This morning, event risk for the NZD is very high, with the US Fed and RBNZ announcing rates in rapid succession,” Kymberly Martin, markets strategist at Bank of New Zealand, said in a note ahead of the release. “An ‘on hold’ decision from the RBNZ, as we expect, could see a dip in the NZD/USD given the market still prices around a 35 percent chance of a hike today. The greater knee-jerk response would come from an unexpected hike. This would likely see an initial spike higher in the NZD.”

Later today, traders will be eyeing reports on Chinese manufacturing and US fourth quarter growth. New Zealand releases data on building consents and migration for December at 10:45am.

The New Zealand dollar fell to 83.98 yen at 8:20am from 85.46 yen at 5pm yesterday as investors favoured safe haven currencies on concern about the impact of the Fed’s tapering on emerging markets.

The kiwi advanced to 94.21 Australian cents from 94.06 cents yesterday and weakened to 60.32 euro cents from 60.65 cents.

The local currency dropped to 49.73 British pence from 49.95 pence yesterday after Bank of England Governor Mark Carney reiterated that the bank is in no rush to raise rates.

(BusinessDesk)

© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

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:

Prices Up, Volume Down: March NZ House Sales Drop 10% As Loan Curbs Bite

New Zealand house sales dropped 10 percent in March from a year earlier as the Reserve Bank’s restrictions on low-equity mortgages continue to weigh on sales of cheaper property. More>>

ALSO:

Scoop Business: Chorus To Appeal Copper Pricing Judgment

Chorus will appeal a High Court ruling upholding the Commerce Commission’s determination setting the regulated prices on the telecommunications network operator’s copper lines. More>>

ALSO:

Earlier:

Cars: Precautionary Recalls Announced For Toyota Vehicles

Toyota advises that a number of its New Zealand vehicles are affected by a series of precautionary global recalls. Toyota New Zealand General Manager Customer Services Spencer Morris stressed that the recalls are precautionary. More>>

ALSO:

'Gardening Club': Air Freight Cartel Nets Almost $12 Million In Penalties

The High Court in Auckland has today ordered Swiss company Kuehne + Nagel International AG to pay a penalty of $3.1 million plus costs for breaches of the Commerce Act. Kuehne + Nagel’s penalty brings the total penalties ordered in this case to $11.95 million ... More>>

ALSO:

Crown Accounts: Revenue Below Projections

Core Crown tax revenue has increased by $1.9 billion (or 5.0%) compared to the same time last year. However this was $1.1 billion less than expected and is reflected across most tax types, continuing the pattern of recent months. More>>

ALSO:

Efficiency: Businesses And Households To Save From New Energy Plans

Minister of Energy and Resources Simon Bridges today announced three energy efficiency initiatives to improve business productivity, save money and reduce carbon emissions. More>>

ALSO:

Get More From Scoop

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