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

 


Kiwi at risk as Ukraine tensions increase


Kiwi at risk as Ukraine tensions increase.


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

Despite the escalation of tensions in Ukraine, the NZ dollar has maintained the gains seen in the post US Payrolls rally, to open at 0.8680. The USD weakened following Friday’s payrolls report, as traders looked through the creation of 288,000 new jobs and focused on the declining participation rate, as more Americans gave up their search for employment. The lack of growth in wages was also a concerning point in the report. This suggests the FED are likely to maintain their stance of lower rates for longer, and with FED Chairman Janet Yellen due to testify on both Wednesday and Thursday, the markets will be watching closely for further guidance. Confirmation of a dovish stance from the FED, with further USD weakness would risk a NZD retest of resistance at 0.8700.

Locally the March quarter unemployment number is due on Wednesday, with a decline from 6.0% to a five-year low of 5.8% expected, and this should occur with an increase in the participation rate. This may also encourage a retest of levels above 0.8700, but in the medium term the NZD continues to look expensive. The NZ TWI continues to remain around 2% above the RBNZ forecast, and with recent evidence of a slowing in the property market and declining commodity prices, the RBNZ must surely be reassessing their OCR rate hike projections. Barfoot & Thompson confirmed their April sales were down 23.6% on a year ago, with the median price falling 5% over the month.

The New Zealand Commodity Price Index fell 5% in NZ Dollar terms to an 8-month low in April – led by large declines in the dairy sector. Tonight sees the result of the latest GlobalDairyTrade auction, and with a 20% fall in prices in the past five auctions the result will be watched closely. Global geopolitical risk is undoubtedly a key factor at present, with the Ukraine situation worsening significantly over the weekend. Markets remain nervous of a continued escalation in tensions there, with risk currencies such as the NZ Dollar most at risk should investors’ appetite for safe havens increase.

Ends

© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

Trade Plans: Prime Minister's Speech To International Business Forum

"The work to improve public services, build infrastructure, and solve social problems is possible only because we have enjoyed sustained, solid economic growth. A big reason for that is the Government’s consistent agenda of economic reform, and our determination to open up more opportunities for trade with the world." More>>

ALSO:

Media: TVNZ Flags Job Cuts To Arrest Profit Decline

Chief executive Kevin Kenrick said the changes were aimed at creating "a sustainable future video content business for TVNZ in an ever-changing media market." More>>

ALSO:

Reserve Bank: Wheeler Keeps OCR At 1.75%

Reserve Bank governor Graeme Wheeler kept the official cash rate unchanged at 1.75 percent, as expected, and reiterated his view that the benchmark rate doesn't need shifting for the foreseeable future. More>>

ALSO:

f work for Pumpkin Patch staff

Retail: Pumpkin Patch Brand, IP Sold To Catch Group

The receivers of failed children's clothing retailer Pumpkin Patch have confirmed that the company's brand and intellectual property have been sold to Australian online retailer Catch Group. More>>

ALSO:

Get More From Scoop

 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news