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

 


NZ dollar falls as Fed minutes show some favour rate hikes

NZ dollar weakens after Fed minutes show some officials favour rate rises in 2014

By Tina Morrison

Feb. 20 (BusinessDesk) – The New Zealand dollar weakened after the Federal Reserve minutes of its January meeting showed some officials raised the possibility of rate rises “relatively soon”.

The kiwi slipped to 82.95 US cents at 8:10am in Wellington from 83.02 cents immediately before the 8am release of the minutes and 82.99 cents at 5pm yesterday. The trade-weighted index was unchanged from yesterday at 77.83.

The US dollar strengthened, pushing the kiwi lower, after the minutes which traders considered were positive on growth with a hawkish bias. The minutes showed policy makers disagreed on the likely timing of the Fed’s first interest rate increase, with a few officials raising the possibility it might be appropriate to increase the federal funds rate “relatively soon”.

“The market is taking it ever so slightly on the hawkish side of things so it is US dollar positive,” said Sam Tuck, senior FX strategist at ANZ Bank New Zealand. “They are really focusing on a statement in the minutes that a few participants raised the possibility it might be appropriate to increase the Federal funds rate relatively soon.”

Still, Tuck said that shouldn’t come as a surprise as Dallas Fed president Richard Fisher and Philadelphia Fed president Charles Plosser, whose views have gained more prominence because they are voting members this year, have previously voiced concerns that the rate has been too low for a very long time.

“In the long term it doesn’t actually change much for the kiwi because people will look through it and realise it is not actually new information,” Tuck said.

In New Zealand today, reports are scheduled for release on fourth quarter producer prices at 10:45am, ANZ job advertisements for January at 10am, and the ANZ-Roy Morgan consumer confidence report for February at 1pm.

Finance Minister Bill English is scheduled to deliver a speech at midday on public administration where he is likely to try to talk down the prospect of spending government surpluses, Raiko Shareef, currency strategist at Bank of New Zealand, said in a note.

Traders will be eyeing China’s latest HSBC/Markit Flash PMI which is expected to show February manufacturing in Asia’s largest economy remained just below the 50 level which delineates contraction and expansion.

The New Zealand dollar weakened to 91.93 Australian cents at 8:10am in Wellington from 92.11 cents yesterday.

The local currency was little changed at 60.34 euro cents from 60.31 cents yesterday, slipped to 49.66 British pence from 49.75 pence and advanced to 84.93 yen from 84.79 yen.

(BusinessDesk)

© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

Scoop Business: NZ Govt Operating Deficit Smaller Than Expected

The New Zealand’s government’s operating deficit was smaller than expected in the first five months of the financial year as a clampdown on expenditure managed to offset a shortfall in the tax-take from last month’s forecast. More>>

ALSO:

0.8 Percent Annually:
NZ Inflation Falls Below RBNZ's Target

New Zealand's annual pace of inflation slowed to below the Reserve Bank's target band in the final three months of the year, giving governor Graeme Wheeler more room to keep the benchmark interest rate lower for longer.More>>

ALSO:

NASA, NOAA: Find 2014 Warmest Year In Modern Record

Since 1880, Earth’s average surface temperature has warmed by about 1.4 degrees Fahrenheit (0.8 degrees Celsius), a trend that is largely driven by the increase in carbon dioxide and other human emissions into the planet’s atmosphere. The majority of that warming has occurred in the past three decades. More>>

ALSO:

Scoop Business: New Zealand’s Reserve Bank Named Central Bank Of The Year

The Reserve Bank of New Zealand’s efforts to stifle house price inflation by using new policy tools has seen the institution named Central Bank of the year by Central Banking Publications, a publisher specialising in global central banking practice. More>>

ALSO:

Science Media Centre: Viral Science And Another 'Big Dry'?

"Potentially, if there is no significant rainfall for the next month or so, we could be heading into one of the worst nation-wide droughts we’ve seen for some time," warns NIWA principal climate scientist Dr Andrew Tait. More>>

ALSO:

Get More From Scoop

 
 
Standards New Zealand

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