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


Kiwi at risk ahead of CPI and Dairy auction

08:08 AEST, Tuesday 15 April 2014

Kiwi at risk ahead of CPI and Dairy auction.

By Garry Dean (Sales Trader, CMC Markets New Zealand)

Wednesday poses as the key day for the NZD this week, with the release of an important data dump from China, the latest Online Dairy auction results, and Q1 CPI in New Zealand. Local traders have priced-in a 0.5% CPI increase for the March quarter, taking the annualised rate to 1.7%. Last fortnight’s Global dairy auction saw prices slump 8.9%, with the currency losing close to two cents. A combined drop of 18% in the past four auctions will significantly increase the focus on tonight’s auction result. The medium-term picture suggests the NZD remains at elevated levels around 0.8700, with daily technical indicators continuing to highlight bearish divergencies from recent traded highs.

Last week’s strong business confidence and manufacturing numbers were supportive of the currency, but it was the release of dovish FOMC minutes that took the NZD to a 3-year high of 0.8746. The minutes suggested US interest rates will remain lower for longer, with traders forced to unwind bets on a stronger USD. Risk aversion on the back of a broad selloff in global equities has capped the NZD however, and news of deadly clashes overnight between pro-Russian separatists and government forces in east Ukraine will limit traders appetite for risk further.

Chinese data on Wednesday includes industrial production and Q1 GDP, and this could have a big impact on commodity currencies. Last week’s Chinese trade numbers were terrible, showing large falls in both exports and imports, and this doesn’t bode well for the GDP read. A drop below the targeted 7.5% is expected, but the potential for additional stimulus measures from the PBOC has reduced somewhat following the release of higher consumer prices last week. This has the potential to impact the NZD, and more particularly the AUD, going forward.


© Scoop Media

Business Headlines | Sci-Tech Headlines


Solid Energy: Plan To Shut Unprofitable Huntly East Mine

Solid Energy, the state-owned coal miner in voluntary administration, plans to shut down its unprofitable Huntly East mine and lay off 65 staff after deciding the site stands "no chance whatsoever" of finding a buyer. More>>


E Tū: Merger Creates NZ's Biggest Private Sector Union

E tū has been created by the merger of the Engineering, Printing and Manufacturing Union and Service and Food Workers’ Union. It represents more than 50,000 working New Zealanders in industries as diverse as aviation, construction, journalism, food manufacturing, mining and cleaning. More>>


Internet: NZ Govt Lifts Target Speeds For Rural Broadband

The government has lifted its expectations on faster broadband speeds for rural New Zealand as it targets increased spending on research and development in the country's information and communications technology sector, which it sees as a key driver for export growth. More>>


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>>


Get More From Scoop

Search Scoop  
Powered by Vodafone
NZ independent news