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

 


NZ dollar advances as Fed's Yellen seen continuing support

NZ dollar advances as Federal Reserve’s Yellen seen continuing asset purchases

By Tina Morrison

April 1 (BusinessDesk) – The New Zealand dollar advanced as investors bet the US Federal Reserve will continue to pull back on its quantitative easing programme even as chair Janet Yellen signalled the world’s largest economy will need support for some time.

The kiwi rose to 86.73 US cents at 8am in Wellington, from 86.55 cents at 5pm yesterday. The trade-weighted index edged up to 80.91 from 80.86 yesterday.

Yellen signalled considerable slack is still present in the US economy and the labour market, with most Fed officials seeing the equilibrium level of unemployment between 5.2 percent and 5.6 percent, below the current 6.7 percent. Still, Bank of New Zealand currency strategist Raiko Shareef said it took just 13 months for the US unemployment rate to fall by a similar amount to the current level, in line with Yellen’s recent comments that interest rate hikes could come six months after an end to the Fed’s quantitative easing programme.

Investors “have taken Fed chair Janet Yellen’s dovish comments in stride this morning because even as she says the Fed is short of reaching its employment and inflation goals, she is still committed to tapering asset purchases at each successive meeting,” Kathy Lien, managing director of FX strategy for BK Asset Management in New York, said in a note. “We believe that most of this week’s US economic reports will show a continued recovery in the US economy.”

Tonight, investors will be eyeing the US ISM manufacturing index.

In Asia today, the focus will be on China’s official manufacturing PMI for March at 2pm New Zealand time and the final reading of the HSBC version at 2:45pm.

The New Zealand dollar weakened to 93.49 Australian cents from 93.75 cents yesterday ahead of the Reserve Bank of Australia’s decision on interest rates at 4:30pm New Zealand time today. The central bank is expected to keep the benchmark rate at 2.5 percent and reiterate that rates will remain stable.

The kiwi touched a fresh six year high of 89.52 Japanese yen overnight. The local currency was trading at 89.48 yen at 8am from 89.03 yen yesterday.

Demand for the yen may be softer as tensions ease between Russia and the Ukraine and on speculation that Japanese asset managers will reallocate into domestic equities and international assets in the new financial year which begins today, BNZ said.

The New Zealand dollar was little changed at 52.01 British pence from 52.04 pence yesterday and unchanged at 62.95 euro cents after weaker than expected European inflation in March.

(BusinessDesk)

© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

SOE Results: TVNZ Lifts Annual Profit 25% On Flat Ad Revenue, Quits Igloo

Television New Zealand, the state-owned broadcaster, lifted annual profit 25 percent, ahead of forecast and despite a dip in advertising revenue, while quitting its stake in the pay-TV Igloo joint venture with Sky Network Television. More>>

ALSO:

Insurers Up For More Payouts: Chch Property Investor Wins Policy Appeal In Supreme Court

Ridgecrest NZ, a property investor, has won an appeal in the Supreme Court over insurance cover provided by IAG New Zealand for a Christchurch building damaged in four successive earthquakes. More>>

ALSO:

Other Cases:

Royal Society: Review Finds Community Water Fluoridation Safe And Effective

A review of the scientific evidence for and against the efficacy and safety of fluoridation of public water supplies has found that the levels of fluoridation used in New Zealand create no health risks and provide protection against tooth decay. More>>

ALSO:

Scoop Business: Croxley Calls Time On NZ Production In Face Of Cheap Imports

Croxley Stationery, whose stationery brands include Olympic, Warwick and Collins, plans to cease manufacturing in New Zealand because it has struggled to compete with lower-cost imports in a market where the printed word is giving way to electronic communications. More>>

ALSO:

Prefu Roundup: Forecasts Revised, Surplus Intact

The National government heads into the election with its Budget surplus target broadly intact, delivering a set of economic and fiscal forecasts marginally revised from May to reflect weaker commodity prices and a lower tax take. More>>

ALSO:

Convention Centre: Major New SkyCity Hotel And Laneway For Auckland

Today SKYCITY Entertainment Group Limited revealed plans to build a new hotel and pedestrian laneway of bars, restaurants and boutique shopping on land it owns in the Nelson and Hobson Streets block, expanding the SKYCITY Entertainment Precinct. More>>

ALSO:

Get More From Scoop

 
 
Computer Power Plus

Standards New Zealand

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