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

 


NZ dollar heads for 1.3 percent weekly decline on TWI basis

NZ dollar heads for 1.3 percent weekly decline on TWI basis after central bank meetings

By Paul McBeth

Jan. 31 (BusinessDesk) - The New Zealand dollar is heading for a 1.3 percent fall on a trade-weighted basis this week after the Reserve Bank kept interest rates on hold and the Federal Reserve trimmed another US$10 billion from its bond buying programme.

The trade-weighted index fell to a month-low, trading at 77.26 at 5pm in Wellington from 78.31 at the close of trading last week, and was down from 77.44 yesterday. The kiwi traded at 81.51 US cents at 5pm from 81.41 cents at 8am, down from 81.78 cents yesterday. It’s heading for a 0.7 percent weekly fall from 82.11 cents at the close of trading last week.

A BusinessDesk survey of six traders and strategists on Monday predicted the local currency would trade between 80.80 US cents and 84.20 cents this week. Four predicted the kiwi would fall this week, while two expected it to remain largely unchanged.

Reserve Bank governor Graeme Wheeler kept the official cash rate at 2.5 percent on Thursday, while saying he would hike rates soon in response to building inflationary pressures. In a speech to a Canterbury business audience today, Wheeler flagged inflation as an important risk to local economic growth, with accelerating building activity threatening to drive up broader consumer prices.

“The fact remains we will see interest rate hikes this year – that’s a given,” said Dan Bell, head of corporate sales at HiFX in Auckland. “We’re going to be one of the only central banks in the developed world raising interest rates, and that should continue to provide support for the New Zealand dollar.”

The US Federal Reserve also reviewed its policy this week in chairman Ben Bernanke’s final meeting, keeping interest rates near zero and winding back its quantitative easing programme to US$65 billion a month from US$75 billion.

HiFX’s Bell said the removal of monetary stimulus should support the greenback as capital is repatriated back to the US. While “the New Zealand dollar won’t necessary fall out of bed, it will struggle to carry through on rallies to the 83 cent mark” and strength in the local currency will likely be borne out on the cross-rates, he said.

New Zealand government figures today showed the country posted a trade surplus of $523 million in December, in line with expectations, with rising sales of dairy products to China underpinning export growth.

The local currency sank to 92.77 Australian cents from 93.60 cents yesterday, and slipped to 83.54 yen from 83.67 yen. It increased to 60.12 euro cents from 59.91 cents, and was little changed at 49.45 British pence from 49.39 pence.

(BusinessDesk)


© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

Scoop Business: NZ Dollar Catches Breath After "Goldilocks" Slump

The New Zealand dollar edged up following its dramatic slump yesterday after the Reserve Bank confirmed speculation it intervened in the currency market last month and PM John Key suggested a “Goldilocks” level far lower than at present. More>>

ALSO:

Biosecurity: Kiwifruit Claim To Hold Officials Accountable For Psa

Kiwifruit growers have joined forces to hold Biosecurity NZ accountable in the courts for its negligence in allowing 2010’s Psa outbreak that devastated New Zealand’s kiwifruit industry and exports. Foundation claimants representing well ... More>>

ALSO:

Poison: Anglers Advised Not To Eat Trout In 1080 Areas

With the fishing season opening in just a few days (1 October 2014), anglers are being warned by the Department of Conservation(DOC) not to eat trout from pristine backcountry waters and their downstream catchments, where the department is conducting 1080 poisoning operations. More>>.

ALSO:

Quotas: MPI Swoop On Suspected Fraudulent Fishing Activity

Ministry for Primary Industries (MPI) compliance officers swooped on a Hawkes Bay fishing enterprise today to secure evidence in an investigation into suspected fraudulent activity... “The investigation involves activity throughout the commercial supply chain – catching, landing, processing and exporting.” More>>

ALSO:

Scoop Business: Fonterra Slashes 2015 Milk Payout, Earnings Tumble 76%

Fonterra Cooperative Group cut its forecast 2015 milk price payout by about 12 percent, citing weaker global dairy prices and said there is a risk of further declines given strong global milk production. More>>

ALSO:

Scoop Business: RBNZ Keeps OCR At 3.5%, Signals Slower Pace Of Future Hikes

Reserve Bank governor Graeme Wheeler kept the official cash rate at 3.5 percent and signalled he won’t be as aggressive with future rate hikes as previously thought as inflation remains tamer than expected. The kiwi dollar fell to a seven-month low. More>>

ALSO:

Weather: Dry Spells Take Hold In South Island

Many areas in the South Island are tracking towards record dry spells as relatively warm, dry weather that began in mid-August continues... for some South Island places, the current period of fine weather is quite rare. More>>

ALSO:

Get More From Scoop

 
 
Computer Power Plus

Standards New Zealand

Standards New Zealand

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