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

 

Interest Rates: RBNZ Hikes OCR To 3.5%, ‘Period Of Assessment’ Now Needed

Reserve Bank governor Graeme Wheeler raised the official cash rate as expected, while signalling a pause in rate hikes to assess the impact of moves so far this year. The kiwi dollar sank after Wheeler said its strength was “unjustified” and that the currency could have “a significant fall.” More>>

ALSO:

Fonterra: Canpac Site 'Resize' To Focus More On Paediatrics

Fonterra is looking at realigning its packing operations at Canpac, in the Waikato, to focus more on paediatric nutritionals... The proposed changes could mean around 110 roles may not be required at the site which currently employs 330. More>>

ALSO:

Scoop Business: Postie Plus Brand Gets 2nd Chance With Well-Funded Pepkor

The Postie Plus brand is getting a new lease of life after South Africa’s Pepkor bought the failed retailer’s assets out of administration and said it will use its purchasing power to reduce costs of stock and fatten margins. More>>

ALSO:

Warming: Warming Signs From State Of Climate Report

Climate data from air, land, sea and ice in 2013 'reflect trends of a warming planet' -- says the latest State of the Climate report, launched by U.S. and New Zealand scientists. More>>

ALSO:

Scoop Business: Embrace Falling Home Affordability, Says NZIER

Despair over the inability to afford a house is misplaced and should be embraced as an opportunity to invest in more wealth-creating activity, says the principal economist at the New Zealand Institute of Economic Research, Shamubeel Eaqub. More>>

Productivity Commission: NZ Regulation Not Keeping Pace

New Zealand regulators often have to work with out-of-date legislation, quality checks are under strain, and regulatory workers need better training and development. More>>

ALSO:

Callaghan Innovation: Investment To Help Deepen Innovation Reporting

Callaghan Innovation, the government’s high tech HQ for Kiwi business, is to help deepen New Zealand media coverage of the commercialisation of innovation through an arms-length partnership with independent business news service BusinessDesk. More>>

ALSO:

Tax Credits, Grants: Greens $1Bn R&D Plan

In the Party’s headline economic announcement, the Greens have launched their plan to build a smarter, more innovative economy which has as its centrepiece an additional $1 billion of government investment in research and development (R&D) above current spend, including tax breaks for business. More>>

ALSO:

Get More From Scoop

 
 
Computer Power Plus

Standards New Zealand

Standards New Zealand
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news