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

 

Housing Policy: Auckland Densification As Popular As Ebola, English Says

Finance Minister Bill English said calls by the Reserve Bank Governor for more densification in Auckland’s housing were “about as popular in parts of Auckland as Ebola” would be. More>>

ALSO:

Crown Accounts: NZ Government Deficit Smaller Than Expected In First Half

The New Zealand government's operating deficit was smaller than expected in the first six months of the financial year, as the consumption and corporate tax take rose ahead of forecast in December, having lagged estimates in previous months. More>>

ALSO:

Fruit & Veg Crackdown: Auckland Fruit Fly Find Under Investigation

The Ministry for Primary Industries (MPI) is investigating a find of a single male Queensland fruit fly in a surveillance trap in the Auckland suburb of Grey Lynn... MPI has placed legal controls on the movement of fruit and some vegetables outside of a defined circular area which extends 1.5km from where the fly was trapped in Grey Lynn. More>>

ALSO:

Scoop Business: Westpac NZ Reaches $2.97M Swaps Settlement

Westpac Banking Corp’s New Zealand unit has agreed to pay $2.97 million in a settlement with the Commerce Commission over the way the bank sold interest rate swaps to farmers between 2005 and 2012. More>>

ALSO:

Going Dutch: Fonterra Kicks Off $144M Partnership With Dutch Cheese Maker

Fonterra Co-operative Group, the world’s largest dairy exporter, has commissioned a new dairy ingredients plant in Heerenveen, in the north of the Netherlands, its first wholly-owned and operated ingredients plant in Europe. More>>

ALSO:

Scoop Business: NZ Retail Sales Beat Estimates

New Zealand retail sales rose more than expected in the fourth quarter, led by vehicle-related transactions, food and beverages, adding to evidence that cheap credit and a growing jobs market are encouraging consumers to spend. More>>

ALSO:

Delivery Cuts Go Ahead: 'Government Money Grab' From NZ Post

"It's a money grab by the Government as the shareholder of New Zealand Post" says Postal Workers Union advocate Graeme Clarke about the changes announced by NZ Post. More>>

ALSO:

Get More From Scoop

 
 
Standards New Zealand

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