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

 


NZ dollar falls vs. British pound as BOE seen hiking rates

NZ dollar falls to 3-week low against British pound as BOE seen eyeing rate rises

By Tina Morrison

May. 22 (BusinessDesk) - The New Zealand dollar fell to a three-week low against the British pound on the expectation a revival in the British economy may prompt the Bank of England to raise interest rates earlier than previously forecast.

The kiwi touched 50.57 British pence early this morning and was trading at 50.65 pence at 8am from 50.79 pence at 5pm yesterday. The local currency was little changed at 85.61 US cents from 85.55 cents yesterday after minutes from the last Federal Reserve meeting showed policy makers expect continued stimulus to push unemployment lower won't hike inflation.

The British pound rose to a 5-1/2 year high against a basket of currencies after a report showed UK retail sales rose more than expected last month to the highest since 2004, signalling growth in the UK economy continues to outpace all other nations in the group of seven advanced economies. Sterling gained an additional push from the Bank of England minutes from its last meeting where members agreed they needed to see more evidence of "slack reducing" before raising the benchmark rate from a record low 0.5 percent, however the decision on whether to increase interest rates for the first time since 2007 was now "more balanced" for some.

"The market reacted with particular vigour to the suggestion in the minutes that the more gradual the rise in rates the earlier BoE need to start the process in order to rebalance the rates," Boris Schlossberg, managing director of foreign exchange strategy at BK Asset Management in New York, said in a note. "This indicates that at least some of the Monetary Policy Committee members are considering the possibility of a rate hike sooner than the expected first quarter of 2015."

Tonight, the UK releases its preliminary reading of first quarter gross domestic product.

The kiwi is now at a critical support level against the British pound that held in late April, and a break below this would open the way for a return to the kiwi trading at 50 pence, Kymberly Martin, senior market strategist at Bank of New Zealand, said in a note.

In New Zealand today, traders will be eyeing the latest ANZ consumer confidence survey and the Reserve Bank's latest quarterly survey of inflation expectations.

Also on the radar is the release of the latest HSBC China purchasing manager's index. The PMI is expected to remain in contraction at 48.3 and a weaker reading could weigh on the New Zealand and Australian currencies as China is the largest trading partner of both nations.

The New Zealand dollar gained to 62.55 euro cents from 62.41 cents yesterday after a report showed May consumer confidence in the Eurozone reached its highest level since October 2007.

The kiwi climbed to 86.82 yen from 86.53 yen yesterday after the Bank of Japan refrained from announcing any further stimulus at its meeting yesterday.

The local currency was unchanged at 92.61 Australian cents. The trade-weighted index edged up to 79.81 from 79.71 yesterday.

(BusinessDesk)

© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

BusinessDesk: APN's NZME Sees Future In Paywalls, Growth In Digital Sales

APN News & Media has touted a single newsroom concept for its NZME unit in New Zealand, similar to what Germany's Die Welt uses, saying an 'integrated sales proposition' is helping it win market share, including ... More>>

Labour Party: Global Milk Prices Now Lowest In 6 Years

The latest fall in the global dairy price has brought it to the lowest level in six years and shows there must be meaningful action in tomorrow’s Budget to diversify the economy, says Labour’s Finance spokesperson Grant Robertson. “Dairy prices ... More>>

BusinessDesk: NZ Inflation Expectations Creep Higher In June Survey

May 19 (BusinessDesk) - New Zealand businesses lifted their expectations for inflation over the next two years, sapping any immediate pressure on the Reserve Bank to cut interest rates, and prompting the kiwi dollar to jump higher. More>>

BusinessDesk: Lower Fuel Costs Drive Down NZ Producer Input, Output Prices

May 19 - Producer input and output prices fell in the first quarter, mainly reflecting lower fuel costs and weakness in prices of meat and dairy products. More>>

Media: Fairfax Media NZ Announces Senior Editorial Team

Fairfax Media New Zealand has today confirmed its new editorial leadership team, as part of a transformation of its newsrooms aimed at enhancing local and national journalism across digital and print. More>>

Science: Flavonoids Reduce Cold And Cough Risk

Flavonoids reduce cold and cough risk Research from the University of Auckland shows eating flavonoids – found in green tea, apples, blueberries, cocoa, red wine and onions – can significantly reduce the risk of catching colds and coughs. The research, ... More>>


BusinessDesk: RBNZ House Alert Speech The Catalyst For Government Action

Prime Minister John Key all but conceded that pressure from the Reserve Bank of New Zealand for concerted action on rampant Auckland house prices was one of the main catalysts for the government's weekend announcements about tightly ... More>>

BusinessDesk: How To Fall Foul Of The New Housing Tax Rules: Tips From IRD

Just because you rented out your investment property doesn't absolve you from paying tax, says the Inland Revenue Department in a summary of commonly made mistakes by non-professional property investors when it comes to their tax liability.More>>

Legal: Superdiversity Law, Policy And Business Stocktake Announced

Mai Chen, Managing Partner at Chen Palmer New Zealand Public and Employment Law Specialists and Adjunct Professor of Law at the University of Auckland, today announced the establishment ... More>>

Housing: More House Price Gains Expected

House price expectations remain high, with a net 56% of respondents expecting house prices will increase. Fears of higher interest rates are fading, consistent with the RBNZ’s signals this year. Affordability and a lack of houses for ... More>>

TDDA: State-Of-The-Art Drug Testing Laboratory To Open In Auckland

World leading drug testing agencies, The Drug Detection Agency (TDDA) and Omega Laboratories, open New Zealand laboratory More>>

Network: Bigpipe Launches Ultra-Fast Broadband Into Wellington

Bigpipe Launches Ultra-Fast Broadband into Wellington Naked broadband provider Bigpipe has extended its national reach, announcing today, the launch of its unlimited UFB offering into Wellington. The Spark Venture business is giving Wellingtonians the ... More>>

Get More From Scoop

 
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news