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

 

Air NZ Wine Awards: Victory For Villa Maria As Pinot Noir Thrills

It was a night to remember as Villa Maria Estate picked up one of the highest accolades of the evening, the O-I New Zealand Reserve Wine of the Show Trophy, at the 28th Air New Zealand Wine Awards. The Villa Maria Single Vineyard Southern Clays Marlborough ... More>>

ALSO:

Future Brighter Money: RBNZ Releases New Bank Note Designs

New Zealand’s banknotes are getting brighter and better, with the Reserve Bank today unveiling more vibrant and secure banknote designs which will progressively enter circulation later next year. More>>

ALSO:

Commerce: Supermarket Inquiry Finds No Breaches By Countdown

The Commerce Commission inquiry into anti-competitive behaviour by Countdown supermarkets, alleged by former Labour Party MP Shane Jones, has found nothing to warrant prosecution, although it warns supermarkets to take care in the way they communicate... More>>

ALSO:

Crown Accounts: English Flags ‘Challenge’ To Budget Surplus

Finance Minister Bill English is warning next month’s half yearly fiscal and economic update from the Treasury may not forecast a budget surplus, saying that returning the government’s accounts to surplus in 2015 will be “a challenge”, given the decline in commodity prices and weak global inflation. More>>

ALSO:

March 2015: Netflix To Launch In Australia And New Zealand

World’s Leading Internet Television Network to Offer Original Series, Movies, Documentaries, Stand-Up Comedy Specials and TV Shows for Low Monthly Price More>>

ALSO:

Price Of Cheese (Is Up): Dairy Product Prices Fall To Five-Year Low

Dairy product prices fell in the latest GlobalDairyTrade auction to the lowest level in more than five years, led by declines in rennet casein and skim milk powder. More>>

ALSO:

Gordon Campbell: On The Australians Scoring Trade Points Against Us With The Chinese

It hasn’t been a great year for Trade Minister Tim Groser... To top it off, Australia has just signed a FTA with China that has far better provisions on dairy exports than what New Zealand currently enjoys in our own FTA with China. More>>

ALSO:

Iwi & Local Consultation: Oil And Gas Block Offer 2015 Begins

Energy and Resources Minister Simon Bridges today announced the start of the Block Offer 2015 process for awarding oil and gas exploration permits. More>>

Get More From Scoop

 
 
Standards New Zealand

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