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

 

Tourism: China Southern Airlines To Fly To Christchurch

China Southern Airlines, in partnership with Christchurch Airport and the South Island tourism industry, has announced today it will begin flying directly between Guangzhou, Mainland China and the South Island. More>>

ALSO:

Dodgy: Truck Shops Come Under Scrutiny

Mobile traders, or truck shops, target poorer communities, particularly in Auckland, with non-compliant contracts, steep prices and often lower-quality goods than can be bought at ordinary shops, a Commerce Commission investigation has found. More>>

ALSO:

Auckland Transport: Government, Council Agree On Funding Approach

The government and Auckland Council have reached a detente over transport funding, establishing a one-year, collaborative timetable for decisions on funding for the city's transport infrastructure growth in the next 30 years after the government refused to fund the $2 billion of short and medium-term plans outlined in Auckland's draft Unitary Plan. More>>

ALSO:

Bullish On China Shock: Slumping Equities, Commodities May Continue, But Not A GFC

The biggest selloff in stock markets in at least four years, slumping commodity prices and a surge in Wall Street's fear gauge don't mean the world economy is heading for another global financial crisis, fund managers say. More>>

ALSO:

Real Estate: Investors Driving Up Auckland Housing Risk - RBNZ

The growing presence of investors in Auckland's property market is increasing the risks, and is likely to both amplify the housing cycle and worsen the potential damage from a downturn both to the financial system and the broader economy, said Reserve Bank deputy governor Grant Spencer. More>>

ALSO:

Annual Record: Overseas Visitors Hit 3 Million Milestone

Visitor arrivals to New Zealand surpassed 3 million for the first time in the July 2015 year, Statistics New Zealand said today. The record-breaking 3,002,982 visitors this year was 7 percent higher than the July 2014 year. More>>

ALSO:

Get More From Scoop

 
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news