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

 


NZ dollar falls to month-low after RBNZ keeps rates on hold

NZ dollar falls to month-low as investors reduce their holdings following RBNZ’s ‘on hold’ decision

By Tina Morrison

Jan 31 (BusinessDesk) – The New Zealand dollar fell to a month-low as investors who had been holding the currency in anticipation the central bank may have hiked rates yesterday reduced their reserves.

The kiwi touched 81.22 US cents this morning, its lowest since Dec. 30. The local currency was trading at 81.41 cents at 8am in Wellington, from 81.78 cents at 5pm yesterday. The trade-weighted index slipped to 77.19 from 77.44 yesterday.

New Zealand’s Reserve Bank yesterday kept the benchmark interest rate at an historic low 2.5 percent in a move anticipated by most economists. Still, traders had priced in about a 35 percent chance of a hike and many investors had refrained from selling down their holdings during turmoil in emerging markets in case they missed out on the benefit of a hike.

“The markets held off applying a risk discount to the New Zealand dollar because of the prospect that the RBNZ was going to increase the yield,” said Sam Tuck, senior FX strategist at ANZ New Zealand. “With the RBNZ on hold until March when they are going to hike rates, and that is fully priced anyway, that freed up the market to apply a risk discount to the kiwi.”

The New Zealand dollar touched 92.56 Australian cents this morning, its lowest in more than two weeks, and was at 92.70 cents at 8am in Wellington, from 93.60 cents yesterday.

“People have been selling kiwi-Aussie and buying Aussie-kiwi suggesting either the risk discount is going to come out of Aussie a bit as the emerging markets settle or the risk discount in kiwi needs to be applied if the emerging markets don’t settle,” said ANZ’s Tuck. “That selling pressure in kiwi-Aussie has forced kiwi-US down as well.”

Today, traders will be looking for further detail on the Reserve Bank’s decision not to hike when governor Graeme Wheeler speaks to the Canterbury Employers Chamber of Commerce at 1pm.

New Zealand’s trade balance for December is scheduled for release at 10:45am. Expectations for a $500 million surplus may arrest the kiwi’s decline, ANZ said.

The kiwi was little changed at 83.63 yen from 83.67 yen yesterday, at 60.08 euro cents from 59.91 cents and unchanged at 49.39 British pence.

(BusinessDesk)

© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

Fonterra: Canpac Site 'Resize' To Focus More On Paediatrics

Fonterra is looking at realigning its packing operations at Canpac, in the Waikato, to focus more on paediatric nutritionals... The proposed changes could mean around 110 roles may not be required at the site which currently employs 330. More>>

ALSO:

Scoop Business: Postie Plus Brand Gets 2nd Chance With Well-Funded Pepkor

The Postie Plus brand is getting a new lease of life after South Africa’s Pepkor bought the failed retailer’s assets out of administration and said it will use its purchasing power to reduce costs of stock and fatten margins. More>>

ALSO:

Warming: Warming Signs From State Of Climate Report

Climate data from air, land, sea and ice in 2013 'reflect trends of a warming planet' -- says the latest State of the Climate report, launched by U.S. and New Zealand scientists. More>>

ALSO:

Scoop Business: Embrace Falling Home Affordability, Says NZIER

Despair over the inability to afford a house is misplaced and should be embraced as an opportunity to invest in more wealth-creating activity, says the principal economist at the New Zealand Institute of Economic Research, Shamubeel Eaqub. More>>

Productivity Commission: NZ Regulation Not Keeping Pace

New Zealand regulators often have to work with out-of-date legislation, quality checks are under strain, and regulatory workers need better training and development. More>>

ALSO:

Callaghan Innovation: Investment To Help Deepen Innovation Reporting

Callaghan Innovation, the government’s high tech HQ for Kiwi business, is to help deepen New Zealand media coverage of the commercialisation of innovation through an arms-length partnership with independent business news service BusinessDesk. More>>

ALSO:

Tax Credits, Grants: Greens $1Bn R&D Plan

In the Party’s headline economic announcement, the Greens have launched their plan to build a smarter, more innovative economy which has as its centrepiece an additional $1 billion of government investment in research and development (R&D) above current spend, including tax breaks for business. More>>

ALSO:

Inflation: CPI Increases 0.3 Percent In June Quarter

The consumers price index (CPI) rose 0.3 percent in the June 2014 quarter, Statistics New Zealand said today. This follows rises of 0.3 percent the March quarter and 0.1 percent in the December 2013 quarter. More>>

ALSO:

Get More From Scoop

 
 
Computer Power Plus

Standards New Zealand

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