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

 


NZ dollar falls after RBNZ keeps rates on hold, Fed move

NZ dollar falls after RBNZ keeps rates on hold, Fed keeps slowing money printing

By Paul McBeth

Jan. 30 (BusinessDesk) - The New Zealand dollar fell after the Reserve Bank kept interest rates unchanged, disappointing some traders hoping for a rise, and after the US Federal Reserve trimmed another US$10 billion from its monthly asset purchase programme, putting emerging markets under more scrutiny.

The kiwi dropped to 81.76 US cents at 5pm in Wellington from 82.38 cents this morning and 82.81 cents yesterday. The trade-weighted index fell as low as 77.36, the lowest since Jan. 3, and was 77.42 at 5pm in Wellington from 78.38 yesterday.

New Zealand’s Reserve Bank governor Graeme Wheeler kept the key rate at 2.5 percent today, while saying interest rates will have to go up soon to head off future inflationary pressures. The market had priced in a 30 percent chance of a hike going into the meeting, leaving some traders disappointed after the review.

“It’s quite clear that the RBNZ was going to err on the side of caution – why raise rates when things are far from crystal clear?” said Stuart Ive, senior client adviser at OMF in Wellington. “Barring a financial market meltdown, the kiwi is a ‘buy on dips’ – sooner or later we will start to normalise policy, which in our case means a start to raise rates.”

The RBNZ meeting came immediately after the Fed reviewed its monetary policy, trimming back its $75 billion monthly quantitative easing to US$65 billion. That reduction of monetary stimulus in the world’s biggest economy has put emerging markets under pressure as they were a key beneficiary of the cheap money, which is now being repatriated to seemingly safer assets.

That fear has led to interest rate hikes by central banks in Turkey and South Africa to shore up steep declines in their respective currencies. Official Chinese government figures today showed manufacturing shrank in January, the first contraction in six months.

New Zealand’s economy showed more signs of strength with government figures showing increased building consent issuance and rising inbound net migration in December. RBNZ’s Wheeler today said he expects annual growth of about 3.5 percent this year.

The New Zealand dollar fell to 83.68 yen at 5pm in Wellington from 85.46 yen and declined to 93.62 Australian cents from 94.06 cents. It dropped to 59.89 euro cents from 60.65 cents yesterday, and decreased to 49.34 British pence from 49.95 pence.

(BusinessDesk)

© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

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:

Scoop Business: Reserve Bank’s Spencer Calls On Govt To Rethink Housing Tax

The Reserve Bank has urged the government to take another look at a capital gains tax on investment in housing, allow increased high-density development and cut red tape for planning consents to address an over-heated Auckland property market. More>>

ALSO:

Get More From Scoop

 
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news