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

 


Kiwi eyes 0.8500 as pullback continues

Kiwi eyes 0.8500 as pullback continues


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

The NZ Dollar continues its downward correction from the over-extended highs of early April, when bearish technical divergences warned the upside momentum above 0.8700 was waning. Initial support is now seen at 0.8500, but with the situation in Ukraine continuing to worsen there remains an extended downside risk if the global risk appetite reduces. The NZD has performed well against the AUD however, following a benign inflation reading in Australia last week. This suggests the RBA are likely to remain on hold for some time, and favours an appreciating NZD/AUD cross.

The OCR increase from the RBNZ last week was anticipated by the market, and resulted in a modest rally which was unable to break above the 0.8640 resistance level. A further hike in June remains likely, but the RBNZ indicated the extent of further increases will be data dependent. With the TWI currently around 1.7% higher than the level forecast in the March MPS, the market is reassessing the requirement for the 200pts of hikes over two years indicated in March, suggesting the Kiwi may still be expensive around current levels.

Tonight’s GlobalDairyTrade auction result will be watched closely again following the 20% fall in the previous five auctions. The impact of these falls will be evident when the Commodity Price Index for April is released on Friday, but major direction for the week is likely to come from events in the US. Thursday’s FOMC meeting is likely to see a further $10 bio of QE tapering, which will take monthly bond purchases down to $45 bio, but FED Chairman Yellen’s speech on Friday is likely to reaffirm US rates will remain low for a considerable period. The week finishes with the April Non-Farm Payrolls on Friday night, with the market looking for the creation of over 200K new jobs and a decline in unemployment to 6.6%.

Ends

© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

Half Full: Dairy Payouts Steady, Cash Will Be Tight

Industry body DairyNZ is advising farmers to focus on strong cashflow management as they look ahead to the 2015-16 season following Fonterra's half-year results announcement today. More>>

ALSO:

First Union: Cotton On Plans To Use “Tea Break” Law

“The Prime Minister reassured New Zealanders that ‘post the passing of this law, will you all of a sudden find thousands of workers who are denied having a tea break? The answer is absolutely not’... Cotton On is proposing to remove tea and meal breaks for workers in its safety sensitive distribution centre. How long before other major chains try and follow suit?” More>>

ALSO:

Scoop Business: NZ-Korea FTA Signed Amid Spying, Lost Sovereignty Claims

A long-awaited free trade agreement between New Zealand and South Korea has been signed in Seoul by Prime Minister John Key and the Korean president, Park Geun-hye. More>>

ALSO:

PM Visit: NZ And Viet Nam Agree Ambitious Trade Target

New Zealand and Viet Nam have agreed an ambitious target of doubling two-way goods and service trade to around $2.2 billion by 2020, Prime Minister John Key has announced. More>>

ALSO:

Scoop Business: NZ Economy Grows 0.8% In Fourth Quarter

The New Zealand economy expanded in the fourth quarter as tourists drove growth in retailing and accommodation, and property sales increased demand for real estate services. More>>

ALSO:

Scoop Business: RBNZ’s Wheeler Keeps OCR On Hold, No Rate Hikes Ahead

The Reserve Bank has removed the prospect of future interest rate hikes from its forecast horizon as a strong kiwi dollar and cheap oil hold down inflation, and the central bank ponders whether to lower its assessment of where “neutral” interest rates should be. The kiwi dollar gained. More>>

ALSO:

Get More From Scoop

 
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news