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

 


NZ dollar jumps to 3-year high after Fed minutes

NZ dollar jumps to 3-year high as traders pull back US interest rate bets on dovish Fed minutes

By Tina Morrison

April 10 (BusinessDesk) – The New Zealand dollar jumped three quarters of a US cent against the greenback to its highest since July 2011 after the Federal Reserve minutes from its last meeting in March pushed out expectations of when the Fed will start raising interest rates.

The kiwi jumped as high as 87.25 US cents from 86.47 cents immediately before the release of the minutes at 6am New Zealand time. The local currency was trading at 87.12 US cents at 8am from 87.01 cents at 5pm yesterday. The trade-weighted index edged lower to 80.76 from 80.83 yesterday.

The dollar index, which measures the greenback against a basket of currencies, plunged to a one-month low after the Federal Open Market Committee meeting minutes from March 18-19 showed policy makers were concerned that projections for an interest rate rise were overstated and could be misconstrued by the market. The more accommodative stance from the Fed minutes prompted traders to pull back bets on rate hikes.

“The broad message from the FOMC minutes is that the FOMC was happy with market pricing and the pace of the US recovery. That means the post-meeting reaction in rates (bringing forward hikes) needed to be unwound,” ANZ Bank New Zealand strategist Carrick Lucas and senior foreign exchange strategist Sam Tuck said in a note. “While the pricing move had mostly been unwound already, the USD selling post the minutes looks like the final capitulation of that positioning.”

The New Zealand dollar is likely to trade between 86.40 US cents and 87.50 cents today, ANZ said.

New Zealand’s Reserve Bank started hiking rates last month to head off rising inflation and a string of increases of between 25 and 50 basis points is expected over the next couple of years as stimulus provided by low interest rates is gradually removed while the economy recovers.

“The key global economies appear stuck with low interest rates for a while yet and, with the RBNZ as the only major central bank looking to unwind monetary policy quickly, the NZD can only go higher,” Bancorp Treasury Services said in a note, adding that the record high 88.41 US cent level is “under threat”.

In New Zealand today, traders will be eyeing the BusinessNZ Performance of Manufacturing Index for March, scheduled for release at 10:30am.

In Australia, the focus will be on March employment data to be published at 1:30pm New Zealand time, which may show the unemployment rate rose to 6.1 percent from 6 percent.

The New Zealand dollar was little changed at 92.80 Australian cents from 92.82 cents yesterday.

Traders will also watch China’s trade figures today for signs of how Asia’s largest economy is tracking. China is the largest trading partner for New Zealand and Australia.

The kiwi weakened to 51.88 British pence from 51.95 pence yesterday ahead of the Bank of England meeting tonight. It slipped to 62.87 euro cents from 63.09 cents yesterday and was unchanged at 88.81 yen.

(BusinessDesk)

© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

Scoop Business: RBNZ Keeps OCR At 3.5%, Signals Slower Pace Of Future Hikes

Reserve Bank governor Graeme Wheeler kept the official cash rate at 3.5 percent and signalled he won’t be as aggressive with future rate hikes as previously thought as inflation remains tamer than expected. The kiwi dollar fell to a seven-month low. More>>

ALSO:

Weather: Dry Spells Take Hold In South Island

Many areas in the South Island are tracking towards record dry spells as relatively warm, dry weather that began in mid-August continues... for some South Island places, the current period of fine weather is quite rare. More>>

ALSO:

Scoop Business: Productivity Commission To Look At Housing Land Supply

The Productivity Commission is to expand on its housing affordability report with an investigation into improving land supply and development capacity, particularly in areas with strong population growth. More>>

ALSO:

Forestry: Man Charged After 2013 Death

Levin Police have arrested and charged a man with manslaughter in relation to the death of Lincoln Kidd who was killed during a tree felling operation on 19 December 2013. More>>

ALSO:

Smells Like Justice: Dairy Company Fined Over Odour

Dairy company fined over odour Dairy supply company Open Country Dairy Limited has been convicted and fined more than $35,000 for discharging objectionable odour from its Waharoa factory at the time of last year’s ”spring flush” when milk supply was high. More>>

Scoop Business: Dairy Product Prices Decline To Lowest Since July 2012

Dairy product prices dropped to the lowest level since July 2012 in the latest GlobalDairyTrade auction, led by a slump in rennet casein and butter milk powder. More>>

ALSO:

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:

Get More From Scoop

 
 
Computer Power Plus

Standards New Zealand

Standards New Zealand

Mosh Social Media
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news