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

 

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:

Export Values Down: NZ Posts Biggest Annual Trade Deficit In 7 Years

New Zealand has recorded its biggest annual trade deficit since April 2009, reflecting weaker prices of agricultural commodities such as dairy products, beef and lamb, and increased imports of vehicles and machinery. More>>

ALSO:

Currency Events: NZ's New $5 Note Wins International Banknote Award

New Zealand’s new Brighter Money $5 note has been named Banknote of the Year in a prestigious international competition. The $5 note was awarded the IBNS Banknote of the Year title at the International Bank Note Society’s annual meeting. More>>

ALSO:

Get More From Scoop

 
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news