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


NZ Dollar Outlook: Kiwi set to fall on Ukraine tension, Fed

NZ Dollar Outlook: Kiwi set to move lower as Ukraine tension, Fed taper weigh

By Tina Morrison

March 17 (BusinessDesk) – The New Zealand dollar may decline from elevated levels this week as concerns about tensions in Ukraine and a likely pullback in stimulus by the Federal Reserve weigh on the currency.

The local dollar may trade between 83.40 US cents and 86.50 cents this week, according to a BusinessDesk survey of nine traders and strategists. Six predict the kiwi will decline this week, while one expects an increase and two see it largely unchanged. The kiwi recently traded at 85.36 US cents from 85.25 cents at 8am.

Investors are cautious, favouring the safe haven Japanese yen, after Crimean voters in a weekend poll chose to break with Ukraine and join Russia, prompting concern about retaliation from the West. Also weighing on the kiwi this week, the Federal Reserve is expected to continue to pull back its stimulus by US$10 billion a month, adding strength to the greenback.

“Recent elevated levels have left the kiwi somewhat extended and those two major factors will weigh on us this week,” said Stuart Ive, senior advisor at OMF. “That may find the kiwi struggling a little bit to gain any further ground against the US dollar.”

The Federal Reserve this week holds its first monetary policy meeting chaired by Janet Yellen and economists expect she will push to continue the policy of reducing stimulus. The decision is scheduled for release on Thursday morning New Zealand time.

Also in the US this week, data on industrial production and housing should bounce following poor weather, while February inflation likely stayed tame, UBS economist Robin Clements said in a note.

In New Zealand this week, fourth quarter data is released on the balance of payments on Wednesday and gross domestic product on Thursday.

GDP rose 0.9 percent in the final three months of 2013, based on a Reuters survey of 11 economists. The current account gap narrowed to $1.4 billion for an annual deficit of $7.4 billion, or 3.3 percent of GDP, a separate survey showed.

The data is unlikely to knock the New Zealand dollar off its perch, ANZ Bank said in a research note.

On Wednesday morning, the latest GlobalDairyTrade report is published, and prices may be under pressure from higher production.

On Friday, tourist arrival data for February is released at 10:45am, while the ANZ-Roy Morgan consumer confidence survey for March will be released at 1pm and credit card spending for February will be published at 3pm.

In Australia, traders will be eyeing tomorrow’s release of the Reserve Bank of Australia’s minutes from their meeting this month.

Little new information is expected from the minutes, while other Australian data on car sales, goods imports and skilled vacancies are second tier and unlikely to move markets, UBS’s Clements said.

Meantime in the UK this week, data will be released on unemployment and the UK budget while the minutes of the Bank of England’s last meeting are scheduled for publication.


© Scoop Media

Business Headlines | Sci-Tech Headlines


Banks: Westpac Keeps Core Government Transactions Contract

The local arm of Westpac Banking Corp has kept its contract with the New Zealand government to provide core transactions, but will have to share peripheral services with its rivals. More>>


Science Investment Plan: Universities Welcome Statement

Universities New Zealand has welcomed the National Statement of Science Investment released by the Government today... this is a critical document as it sets out the Government’s ten-year strategic direction that will guide future investment in New Zealand’s science system. More>>


Scouring: Cavalier Merger Would Extract 'Monopoly Rents' - Godfrey Hirst

A merger of Cavalier Wool Holdings and New Zealand Wool Services International's two wool scouring operations would create a monopoly, says carpet maker Godfrey Hirst. The Commerce Commission on Friday released its second draft determination on the merger, maintaining its view that the public benefits would outweigh the loss of competition. More>>


Scoop Review Of Books: She Means Business

As Foreman says in her conclusion, this is a business book. It opens with a brief biographical section followed by a collection of interesting tips for entrepreneurs... More>>


Hourly Wage Gap Grows: Gender Pay Gap Still Fixed At Fourteen Percent

“The totally unchanged pay gap is a slap in the face for women, families and the economy,” says Coalition spokesperson, Angela McLeod. Even worse, Māori and Pacific women face an outrageous pay gap of 28% and 33% when compared with the pay packets of Pākehā men. More>>


Housing: English On Housing Affordability And The Economy

"Long lead times in the planning process tend to drive prices higher in the upswing of the housing cycle. And those lead times increase the risk that eight years later, when additional supply arrives, the demand shock that spurred the additional supply has reversed. The resulting excess supply could produce a price crash..." More>>


Get More From Scoop

Search Scoop  
Powered by Vodafone
NZ independent news