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

 

Maritime: Navigation Safety Review Raises Big Issues For The Govt

Shipping Federation: "The reports makes it clear that the ratification of the Maritime Labour convention (MLC) is long overdue. Only when the MLC is ratified will Maritime NZ be able to inspect and enforce the labour conditions on international ships visiting our ports." More>>

ALSO:

100 Years After Einstein Prediction: Gravitational Waves Found

For the first time, scientists have observed ripples in the fabric of spacetime called gravitational waves, arriving at the earth from a cataclysmic event in the distant universe. This confirms a major prediction of Albert Einstein’s 1915 general theory of relativity and opens an unprecedented new window onto the cosmos. More>>

ALSO:

Farming: Alliance Plans To Start Docking Farmer Payments

Alliance Group, New Zealand's second-largest meat cooperative, plans to start withholding some stock payments to its farmers from next week to bolster its balance sheet and force suppliers to meet their share requirements. More>>

ALSO:

Gambling: SkyCity First Half Profit Rises 30%, Helped By High Rollers

SkyCity anticipates the Auckland business will benefit from government gaming concessions which were triggered on Nov. 11 in recognition of SkyCity’s $470 million Convention Centre development. Morrison said the concessions would allow the Auckland business to lift its activity during peak period, noting it had a record revenue week over the Christmas and New Year period. More>>

ALSO:

Money For Light: Kiwi Scientists Secure Preferential Access To Synchrotron

Science and Innovation Minister Steven Joyce today announced a three-year investment of $2.8 million in the Australian Synchrotron, the largest piece of scientific infrastructure in the Southern Hemisphere, to secure preferential access for Kiwi scientists. More>>

Telco Industry Report: Investment Hits $1.7 Bln A Year

Investment in the telecommunications sector is $1.7 billion a year, proportionately one of the highest levels in the OECD, according to a report released today on the status of the New Zealand sector. More>>

ALSO:

PGPs: New Programme Sets Sights On Strong Wool

A new collaboration between The New Zealand Merino Company (NZM) and the Ministry for Primary Industries (MPI), announced today, aims to deliver premiums for New Zealand's strong wool sector... More>>

ALSO:

Get More From Scoop

 
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news