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

 

Trade Plans: Prime Minister's Speech To International Business Forum

"The work to improve public services, build infrastructure, and solve social problems is possible only because we have enjoyed sustained, solid economic growth. A big reason for that is the Government’s consistent agenda of economic reform, and our determination to open up more opportunities for trade with the world." More>>

ALSO:

Media: TVNZ Flags Job Cuts To Arrest Profit Decline

Chief executive Kevin Kenrick said the changes were aimed at creating "a sustainable future video content business for TVNZ in an ever-changing media market." More>>

ALSO:

Reserve Bank: Wheeler Keeps OCR At 1.75%

Reserve Bank governor Graeme Wheeler kept the official cash rate unchanged at 1.75 percent, as expected, and reiterated his view that the benchmark rate doesn't need shifting for the foreseeable future. More>>

ALSO:

Retail: Pumpkin Patch Brand, IP Sold To Catch Group

The receivers of failed children's clothing retailer Pumpkin Patch have confirmed that the company's brand and intellectual property have been sold to Australian online retailer Catch Group. More>>

ALSO:

Oil: 2017 Block Offer Petroleum Tender Launched

New Zealand is well-placed to take advantage of the economic benefits of oil and gas exploration, Energy and Resources Minister Judith Collins announced today at the launch of the 2017 Block Offer petroleum tender. More>>

ALSO:

OECD And Zero Carbon Reports: Environmental Pressures Rising In New Zealand

New Zealanders enjoy a high environmental quality of life and access to pristine wilderness. However, New Zealand’s growth model, based largely on exploiting natural resources, is starting to show its environmental limits with increasing greenhouse gas emissions and water pollution ... More>>

ALSO:

Get More From Scoop

 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news