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

 


NZ dollar heads for 0.7% weekly fall

NZ dollar heads for 0.7% weekly fall on prospect of slower rate hikes

By Paul McBeth

May. 23 (BusinessDesk) - The New Zealand dollar is heading for a 0.7 percent weekly decline as improving prospects for global growth buoyed the greenback, and left traders to mull the prospect of a slower cycle of local interest rate hikes.

The kiwi fell to 85.62 US cents at 5pm in Wellington from 86.21 cents last Friday in New York. It traded at 85.61 cents at 8am, down from 85.82 cents yesterday. The trade-weighted index was at 79.91 from 79.98 yesterday, and is heading for a 0.4 percent weekly decline.

A BusinessDesk survey of 11 traders and strategists on Monday predicted the local currency would trade between 85 US cents and 87.40 cents this week. Six predicted the kiwi would remain neutral this week, while two picked it to increase and three said it would decline.

Better than expected manufacturing indicators in the US and China helped buoy the greenback yesterday after minutes to the latest Federal Reserve policy meeting this week showed there was scope still scope for the US to run near-zero interest rates. Tepid inflation In New Zealand has caused investors to question whether the central bank will hike interest rates as aggressively as thought, and are looking to the next monetary policy statement in June for guidance. Traders are betting the Reserve Bank will lift the official cash rate 84 basis points over the coming 12 months, down from 90 points in early May before governor Graeme Wheeler threatened he may intervene in currency markets if the kiwi doesn't follow falling commodity prices.

"We've still got fears that the Reserve Bank will cut the OCR track in two weeks," said Imre Speizer, market strategist at Westpac Banking Corp in Auckland. "That's putting downward pressure on the kiwi and could take a new lease of life next week."

An ANZ-Roy Morgan survey today showed New Zealand consumer confidence continued to come off pre-recession highs, while remaining at elevated levels, with rising interest rates starting to bite into people's optimism.

Traders will be watching the German IFO business survey and data on US new home sales in the Northern Hemisphere session.

The local currency fell to 87.12 yen at 5pm in Wellington from 87.26 yen yesterday, and gained to 92.65 Australian cents from 92.51 cents. It was little changed at 62.72 euro cents from 62.75 cents, and traded at 50.74 British pence from 50.80 pence.

(BusinessDesk)

© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

Half Full: Dairy Payouts Steady, Cash Will Be Tight

Industry body DairyNZ is advising farmers to focus on strong cashflow management as they look ahead to the 2015-16 season following Fonterra's half-year results announcement today. More>>

ALSO:

First Union: Cotton On Plans To Use “Tea Break” Law

“The Prime Minister reassured New Zealanders that ‘post the passing of this law, will you all of a sudden find thousands of workers who are denied having a tea break? The answer is absolutely not’... Cotton On is proposing to remove tea and meal breaks for workers in its safety sensitive distribution centre. How long before other major chains try and follow suit?” More>>

ALSO:

Scoop Business: NZ-Korea FTA Signed Amid Spying, Lost Sovereignty Claims

A long-awaited free trade agreement between New Zealand and South Korea has been signed in Seoul by Prime Minister John Key and the Korean president, Park Geun-hye. More>>

ALSO:

PM Visit: NZ And Viet Nam Agree Ambitious Trade Target

New Zealand and Viet Nam have agreed an ambitious target of doubling two-way goods and service trade to around $2.2 billion by 2020, Prime Minister John Key has announced. More>>

ALSO:

Scoop Business: NZ Economy Grows 0.8% In Fourth Quarter

The New Zealand economy expanded in the fourth quarter as tourists drove growth in retailing and accommodation, and property sales increased demand for real estate services. More>>

ALSO:

Scoop Business: RBNZ’s Wheeler Keeps OCR On Hold, No Rate Hikes Ahead

The Reserve Bank has removed the prospect of future interest rate hikes from its forecast horizon as a strong kiwi dollar and cheap oil hold down inflation, and the central bank ponders whether to lower its assessment of where “neutral” interest rates should be. The kiwi dollar gained. More>>

ALSO:

Get More From Scoop

 
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news