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

 


NZ dollar drops after RBNZ’s Wheeler talks intervention

NZ dollar drops after RBNZ’s Wheeler keeps currency intervention option open

By Paul McBeth

May 7 (BusinessDesk) - The New Zealand dollar fell after Reserve Bank governor Graeme Wheeler said he may intervene in currency markets if the kiwi stays strong in the face of falling dairy prices.

The local currency dropped to 86.89 US cents from 87.41 cents immediate before the speech, 87.47 cents at 8am and 86.91 cents yesterday. The trade-weighted index fell to 80.43 from a post-float high 81.21 in Northern Hemisphere trading and 80.72 yesterday.

RBNZ’s Wheeler told a dairy conference in Hamilton the currency was still overvalued, and “it would become more opportune for the Reserve Bank to intervene in the currency market to sell New Zealand dollars” if the kiwi remains high while commodity prices fall. The speech came after dairy prices at Fonterra Cooperative Group’s GlobalDairyTrade auction fell for a sixth time, fuelling speculation the world’s biggest dairy exporter will reduce its forecast payout to farmers.

“We suspect it was a reminder from the RBNZ that there are currency concerns in the economy and that they do have options,” said Sam Tuck, senior FX strategist at ANZ Bank New Zealand in Auckland. “It should take the edge off it (the kiwi dollar’s strength) a little bit – you’ve got to respect the central bank.”

The local currency rose against a weak US dollar in New York trading yesterday, touching a three-year high against the greenback.

Federal Reserve chair Janet Yellen is giving testimony to the Joint Economic Committee at Congress on Wednesday in Washington, and investors will be looking for insights into her thinking about the strength of recent US data.

Traders largely ignored New Zealand’s employment figures, which showed stronger than expected quarterly jobs growth of 0.9 percent and a record participation rate, which kept the unemployment rate unchanged at 6 percent.

The kiwi fell to 93 Australian cents from 93.63 cents yesterday after retail sales rose 1.2percent in March, below expectations. The Reserve Bank of Australia noted improving consumer demand in yesterday’s monetary policy review, which kept the key rate at 2.5 percent.

The local currency fell to 88.29 yen at 5pm in Wellington from 88.67 yen yesterday, and declined to 62.38 euro cents from 62.59 cents. It dropped to 51.17 British pence from 51.45 pence.

(BusinessDesk)


© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

Trade Agreements: TPP Minus US Starting To Gain Ground

The Japanese government is picking up the pace on reviving the Trans-Pacific Partnership trade and investment deal, with talks scheduled next month among the 11 countries left in the pact after the withdrawal by the US after the election of president Donald Trump. More>>

ALSO:

PACER:

Prices Up 2.2%: Annual Inflation Highest In Over Five Years

"Rising petrol prices along with the annual rise in cigarette and tobacco tax lifted inflation," prices senior manager Jason Attewell said. "Petrol prices in New Zealand are closely linked to global oil prices, and cigarettes and tobacco taxes rise in the March quarter each year". More>>

ALSO:

Undertaxed? NZ Income Tax Rate Second Lowest Among Developed Nations

New Zealand workers pay the second smallest portion of their income to the government among developed nations and less than half the average ratio of their Organisation for Economic Cooperation and Development peers. More>>

ALSO:

Cyclone Cook: Round Up Of This Week’s Weather

One of the significant impacts this week was flooding due to excessive rainfall amounts. Rainfall amounts topped out at 350mm over the past 60 hours in parts of northwest Nelson, with 200mm+ measurements recorded about Coromandel Peninsula, and between 150-200mm in the Kaimai Ranges. Rainfall amounts of between 30-50mm were commonplace elsewhere. More>>

ALSO:

Earlier: Batten Down The Hatches For Cyclone Cook

Although fast-moving, Cyclone Cook will be destructive and MetService Expert Meteorologists have issued Severe Wind Warnings for the whole of the North Island apart from Northland... More>>

ALSO:

Get More From Scoop

 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news