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.


© Scoop Media

Business Headlines | Sci-Tech Headlines


Oceans: NOAA Declares Third Ever Global Coral Bleaching Event

As record ocean temperatures cause widespread coral bleaching across Hawaii, NOAA scientists confirm the same stressful conditions are expanding to the Caribbean and may last into the new year, prompting the declaration of the third global coral bleaching event ever on record. More>>

Scoop Business: A Decade Of Government Pre-Seed Investment

More publicly-funded science is being commercialised after a decade of government ‘pre-see’d investment, according to an independent review. More>>


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>>


Get More From Scoop

Search Scoop  
Powered by Vodafone
NZ independent news