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

 

Scoop Business: Fletcher To Close Its Christchurch Insulation Plant, Cut 29 Jobs

Fletcher Building, New Zealand’s largest listed company, will close its Christchurch insulation factory, as it consolidates its Tasman Insulations operations in a “highly competitive market”. More>>

ALSO:

Scoop Business: Novartis Adds Nine New Treatments Under Pharmac Deal

Novartis New Zealand, the local unit of the global pharmaceuticals firm, has added nine new treatments in a far-ranging agreement with government drug buying agency, Pharmac. More>>

ALSO:

Crown Accounts: English Wary On Tax Take, Could Threaten Surplus

Finance Minister Bill English is warning the tax take may come in below forecast in the current financial year, as figures released today confirm it was short by nearly $1 billion in the year to June 30 and English warned of the potential impact of slumping receipts from agricultural exports. More>>

ALSO:

Auckland Outage: Power Mostly Restored Overnight

Vector wishes to advise that all but 324 customers have been restored overnight. These customers are spread throughout the network in small pockets. The main St Johns feeder was restored around midnight allowing most of the customers in all affected areas to have power this morning. More>>

ALSO:

Half Empty: Dairy Prices Drop To Lowest Since August 2009

Dairy product prices fell to the lowest level in more than five years in the latest GlobalDairyTrade auction, led by declines in butter milk powder and whole milk powder. More>>

ALSO:

Get More From Scoop

 
 
Standards New Zealand

Standards New Zealand

Mosh Social Media
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news