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

 

Half A Billion Accounts: Yahoo Confirms Huge Data Breach

The account information may have included names, email addresses, telephone numbers, dates of birth, hashed passwords (the vast majority with bcrypt) and, in some cases, encrypted or unencrypted security questions and answers. More>>

Rural Branches: Westpac To Close 19 Branches, ANZ Looks At 7

Westpac confirms it will close nineteen branches across the country; ANZ closes its Ngaruawahia branch and is consulting on plans to close six more branches; The bank workers union says many of its members are nervous about their futures and asking ... More>>

Interest Rates: RBNZ's Wheeler Keeps OCR At 2%

Reserve Bank governor Graeme Wheeler kept the official cash rate at 2 percent and said more easing will be needed to get inflation back within the target band. More>>

ALSO:

Half Full: Fonterra Raises Forecast Payout As Global Supply Shrinks

Fonterra Cooperative Group, the dairy processor which will announce annual earnings tomorrow, hiked its forecast payout to farmers by 50 cents per kilogram of milk solids as global supply continues to decline, helping prop up dairy prices. More>>

ALSO:

Results:

Meat Trade: Silver Fern Farms Gets Green Light For Shanghai Maling Deal

The government has given the green light for China's Shanghai Maling Aquarius to acquire half of Silver Fern Farms, New Zealand's biggest meat company, with ministers satisfied it will deliver "substantial and identifiable benefit". More>>

ALSO:

Get More From Scoop

 
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news