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

 


NZ dollar falls to nine-day low after CPI misses estimates

NZ dollar falls to nine-day low after slower than expected inflation

By Paul McBeth

April 16 (BusinessDesk) - The New Zealand dollar dropped to a nine-day low after slower than expected inflation raised questions over the track of rising local interest rates.

The kiwi fell as low as 85.79 cents, trading at 85.86 cents at 5pm in Wellington from 86.39 cents at 8am and 86.50 cents yesterday. The trade-weighted index dropped to 79.75 from 80.27 yesterday.

New Zealand’s consumers price index slowed to an annual increase of 1.5 percent in the three months ended March 31, from 1.6 percent in the December period, and below the Reserve Bank’s forecast. The tradable sector, which covers goods and services facing international competition, kept a lid on imported prices, while housing underpinned rising prices.

Still, traders have priced in a 97 percent chance the Reserve Bank will hike the official cash rate a quarter-point to 3 percent next week as governor Graeme Wheeler continues to try and head off building inflation pressures in the economy.

“The currency is acting as a shock absorber, and I can’t see it going too far while the RBNZ is actively reducing policy stimulus, increasing New Zealand’s yield advantage compared to the rest of the world,” said Sam Tuck, senior FX strategist at ANZ Bank New Zealand in Auckland. “Every time the market has tried to take the kiwi down, it comes back smelling of roses.”

The inflation figures followed another decline in dairy prices at Fonterra Cooperative Group’s GlobalDairyTrade auction to a 14-month low. The GDT price index dropped 2.6 percent to US$4,047 a tonne, from US$4,124 a tonne two weeks ago, the fifth straight decline and the lowest since February 2013.

China’s economy grew at a faster than expected annual pace of 7.4 percent in the March quarter, according to government figures, easing fears the world’s second-biggest economy and Australia and New Zealand’s biggest trading partner is slowing down.

Traders will be watching for a speech from Federal Reserve chair Janet Yellen to the New York Economic Club on Wednesday in the US, the release of the Fed’s beige book and the Philadelphia Fed’s business survey. UK unemployment and the Bank of Canada policy review will also be eyed.

The kiwi fell to 91.63 Australian cents at 5pm in Wellington from 92.10 cents yesterday, and dropped to 87.73 yen from 88.15 yen. It declined to 62.15 euro cents from 62.60 cents yesterday, and decreased to 51.35 British pence from 51.74 pence.

(BusinessDesk)

© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

Petrol Burns Prices: Second Consecutive Quarterly Fall For CPI

The consumers price index (CPI) fell 0.3 percent in the March 2015 quarter, following a 0.2 percent fall in the December 2014 quarter, Statistics New Zealand said today. The last time the CPI showed two consecutive quarterly falls was in the December 1998 and March 1999 quarters. More>>

ALSO:

Scoop Business: NZ Broadcasters Launch Battle Against Global Mode ISPs

New Zealand broadcasters have confirmed they’ve launched legal proceedings against internet service providers who give customers’ access to “global mode”, which allows customers access to offshore online content, claiming it breaches the local content providers’ copyright. More>>

ALSO:

Sanford: Closure Of Christchurch Mussel Processing Plant Confirmed

The decision comes after a period of consultation with the 232 staff employed at the Riccarton site, who were told on 9 April that Sanford was considering the future of mussel processing in Christchurch. Recent weather patterns had impacted on natural spat (offspring) supply... More>>

ALSO:

Price Of Cheese: Dairy Product Prices Fall To The Lowest This Year

Dairy product prices fell in the latest GlobalDairyTrade auction, hitting the lowest level in the 2015 auctions so far, as prices for milk powder and butter slid amid concern about the outlook for commodities. More>>

ALSO:

Houston, We Have An Air Route: Air New Zealand To Fly Direct To The Heart Of Texas

Air New Zealand will fly its completely refitted Boeing 777-200 aircraft between Auckland and Houston up to five times a week opening up the state of Texas as well as popular nearby tourist states such as Louisiana and Florida. More>>

ALSO:

Scoop Business: Reserve Bank’s Spencer Calls On Govt To Rethink Housing Tax

The Reserve Bank has urged the government to take another look at a capital gains tax on investment in housing, allow increased high-density development and cut red tape for planning consents to address an over-heated Auckland property market. More>>

ALSO:

Get More From Scoop

 
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news