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

 

Pre-Budget: Computer Emergency Response Team, Assemble!

John Key told the country's first ever Cyber Security Summit in Auckland that the government had earmarked funding set up a national Computer Emergency Response Team to help prevent and act on cyber incidents in partnership with the private sector and other organisations. More>>

ALSO:

Job Cutter Goes: Mark Weldon To Step Down As MediaWorks CEO

“When I joined MediaWorks in August 2014, I had a mandate to lead a significant change programme to bring the business back from receivership into a position where it could once again be a strong competitor in the market, with a sound and sustainable future. It was a big brief, laden with inherent challenges, but I took it in good faith and have dedicated myself fully to the goal since." More>>

ALSO:

Must Sell 20 Petrol Stations: Z Cleared To Buy Caltex Assets

Z Energy is allowed to buy the Caltex and Challenge! petrol station chains but must sell 19 of its retail sites and one truck-stop, the Commerce Commission has ruled in a split decision that acknowledges possible retail price coordination between fuel retailers occurs in some regions. More>>

ALSO:

Huntly: Genesis Extends Life Of Coal-Fuelled Power Station To 2022

Genesis Energy will keep its two coal and gas-fired units at Huntly Power Station operating until 2022, having previously said they'd be closed by 2018, after wringing a high price from other electricity generators who wanted to keep them as back-up. More>>

ALSO:

Dammed If You Do: Ruataniwha Irrigation Scheme Hits Farmer Uptake Targets

Enough Hawke's Bay farmers have signed up for water from the proposed Ruataniwha Water Storage Scheme for it to go ahead as long as a cornerstone institutional capital investor can be found to back it, its regional council promoter announced. More>>

ALSO:

Reserve Bank: OCR Stays At 2.25%

Reserve Bank governor Graeme Wheeler kept the official cash rate at 2.25 percent, in a decision traders had said could go either way, while predicting inflation will pick up as the slump in oil prices washes out of the data and capacity pressures start to build in the economy. More>>

ALSO:

Get More From Scoop

 
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news