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

 


NZ dollar slides; weaker dairy prices weigh on rate outlook

NZ dollar slides as weaker dairy prices weigh on rate outlook, ECB meeting looms

By Paul McBeth

April 3 (BusinessDesk) - The New Zealand dollar dropped as declining dairy prices raised concern about the country’s biggest export commodity, and fuelled speculation the Reserve Bank might not hike interest rates as aggressively as expected.

The kiwi traded at 85.47 US cents at 5pm in Wellington from 85.58 cents at 8am, down from 86.02 cents yesterday. The trade-weighted index dropped to 79.97 from 80.37 yesterday.

Traders are questioning whether the Reserve Bank will raise the official cash rate as quickly as anticipated this year after dairy prices extended their decline at yesterday’s GlobalDairyTrade auction. The local currency has been trading above the central bank’s March projections, and weaker dairy prices would lead to a decline in the nation’s terms of trade, which is seen as a key indicator for the kiwi’s direction.

“It puts pressure on the kiwi because people get the sense the Reserve Bank might scale back its rate hike programme,” said Imre Speizer, market strategist at Westpac Banking Corp in Auckland. “The risk is the OCR track gets downgraded and the market knowing that is happy to sell the kiwi so some extent.”

The European Central Bank will review monetary policy in Brussels on Thursday, and tame inflation in the euro-zone has sparked speculation the regulator may cut rates or add stimulus to the regional economy. The kiwi fell to 62.12 euro cents from 62.31 cents yesterday.

Westpac’s Speizer said if the ECB does loosen policy, it would lead to “very heavy euro selling” and weigh on the kiwi dollar against the greenback.

Reserve Bank of Australia governor Glenn Stevens told a business audience in Queensland today it was too early to say the transition to domestic-led growth from mining investment was smooth, though the early signs were positive. The kiwi declined to 92.69 Australian cents from 93.06 cents yesterday.

The local currency fell to 88.87 yen from 89.30 yen yesterday, and decreased to 51.37 British pence from 51.73 pence.

(BusinessDesk)

© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

Fossils: Ancient Penguins Lived Alongside Dinosaurs?

Penguins are much older than previously thought and their evolution probably dates back to the days of the dinosaurs, according to research on the fossilised leg bone and toes of a giant ancient penguin found in rocks near Waipara, North Canterbury. More>>

No Voda/Sky: Commission Declines Clearance For Merger

The Commerce Commission has declined to grant clearance for the proposed merger of Sky Network Television and Vodafone New Zealand. More>>

ALSO:

EARLIER:

Power: IEA Report On New Zealand's Energy System

Outside of its largely low-carbon power sector, managing the economy’s energy intensity and greenhouse gas emissions while still remaining competitive and growing remains a challenge. More>>

ALSO:

NASA: Seven Earth-Size Planets Around A Single Star

NASA's Spitzer Space Telescope has revealed the first known system of seven Earth-size planets around a single star. Three of these planets are firmly located in the habitable zone, the area around the parent star where a rocky planet is most likely to have liquid water. More>>

ALSO:

Auckland Transport Case: Men Guilty Of Corruption And Bribery Will Spend Time In Jail

Two men who were found guilty of corruption and bribery in a Serious Fraud Office (SFO) trial have been sentenced in the Auckland High Court today... The pair are guilty of corruption and bribery offences relating to more than $1 million of bribes which took place between 2005 and 2013 at Rodney District Council and Auckland Transport. More>>

ALSO:

Hager Raid: Westpac Wrong To Release Bank Records To Police

The Privacy Commissioner has censured Westpac Banking Corp for releasing without a court order more than 10 months of bank records belonging to the political activist and journalist Nicky Hager during a police investigation into leaked information published in Hager's 2014 pre-election book, 'Dirty Politics'. More>>

ALSO:

EARLIER:

Get More From Scoop

 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news