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

 

Fruitful Endeavours: Kiwifruit Exports Reach Record Levels

In June 2016, kiwifruit exports rose $105 million (47 percent) from June 2015 to reach $331 million, Statistics New Zealand said today. Overall, goods exports rose $109 million (2.6 percent) in June 2016 (to $4.3 billion). More>>

ALSO:

Economic Update: RBNZ Says Rate Cut Seems Likely

The Reserve Bank will likely cut interest rates further as a persistently strong kiwi dollar makes it difficult for the bank to meet its inflation target, it said. The local currency fell. More>>

ALSO:

House Price Action Plan: RBNZ Signals National Lending Restrictions

The central bank wants to cap bank lending to property investors with a deposit of less than 40 percent at 5 percent and restore the 10 percent limit for owner-occupiers wanting to take out a mortgage with a deposit of less than 20 percent, according to a consultation paper released today. More>>

ALSO:

Sparks Fly: Gordon Campbell On China Steel Dumping Allegations

No doubt, officials on the China desk at MFAT have prided themselves on fashioning a niche position for New Zealand right in between the US and China – and leveraging off both of them! Well, as the Aussies would say, of MFAT: tell ‘em they’re dreaming. More>>

ALSO:

Loan Sharks: Finance Companies Found Guilty Of Breaching Fair Trading Act

Finance companies Budget Loans and Evolution Finance, run by former 1980s corporate high-flyer Allan Hawkins, have been found guilty of 106 charges of breaching the Fair Trading Act for misleading 21 borrowers while enforcing loan contracts. More>>

ALSO:

Post Panama Papers: Govt To Adopt Shewan's Foreign Trust Recommendations

The government will adopt all of the recommendations from former PwC chairman John Shewan to increase disclosure and introduce a register for foreign trusts with new legislation to be introduced next month. More>>

ALSO:

Get More From Scoop

 
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news