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

 

Sky City : Auckland Convention Centre Cost Jumps By A Fifth

SkyCity Entertainment Group, the casino and hotel operator, is in talks with the government on how to fund the increased cost of as much as $130 million to build an international convention centre in downtown Auckland, with further gambling concessions ruled out. The Auckland-based company has increased its estimate to build the centre to between $470 million and $530 million as the construction boom across the country drives up building costs and design changes add to the bill.
More>>

ALSO:

RMTU: Mediation Between Lyttelton Port And Union Fails

The Rail and Maritime Union (RMTU) has opted to continue its overtime ban indefinitely after mediation with the Lyttelton Port of Christchurch (LPC) failed to progress collective bargaining. More>>

Earlier:

Science Policy: Callaghan, NSC Funding Knocked In Submissions

Callaghan Innovation, which was last year allocated a budget of $566 million over four years to dish out research and development grants, and the National Science Challenges attracted criticism in submissions on the government’s draft national statement of science investment, with science funding largely seen as too fragmented. More>>

ALSO:

Scoop Business: Spark, Voda And Telstra To Lay New Trans-Tasman Cable

Spark New Zealand and Vodafone, New Zealand’s two dominant telecommunications providers, in partnership with Australian provider Telstra, will spend US$70 million building a trans-Tasman submarine cable to bolster broadband traffic between the neighbouring countries and the rest of the world. More>>

ALSO:

More:

Statistics: Current Account Deficit Widens

New Zealand's annual current account deficit was $6.1 billion (2.6 percent of GDP) for the year ended September 2014. This compares with a deficit of $5.8 billion (2.5 percent of GDP) for the year ended June 2014. More>>

ALSO:

Still In The Red: NZ Govt Shunts Out Surplus To 2016

The New Zealand government has pushed out its targeted return to surplus for a year as falling dairy prices and a low inflation environment has kept a lid on its rising tax take, but is still dangling a possible tax cut in 2017, the next election year and promising to try and achieve the surplus pledge on which it campaigned for election in September. More>>

ALSO:

Job Insecurity: Time For Jobs That Count In The Meat Industry

“Meat Workers face it all”, says Graham Cooke, Meat Workers Union National Secretary. “Seasonal work, dangerous jobs, casual and zero hours contracts, and increasing pressure on workers to join non-union individual agreements. More>>

ALSO:

Get More From Scoop

 
 
Standards New Zealand

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