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

 


NZ dollar weakens as greenback buoyed by economic optimism

NZ dollar weakens as greenback buoyed by economic optimism

By Tina Morrison

May. 26 (BusinessDesk) - The New Zealand dollar fell as positive US economic data strengthened the greenback and some investors reduced their holdings of the local currency on concern about falling commodity prices.

The kiwi slipped to 85.36 US cents at 8am in Wellington, from 85.39 cents at the New York close and 85.61 cents at 5pm in Wellington on Friday. The trade-weighted index dropped to 79.75 from 79.92 on Friday.

The US dollar index, which measures the greenback against a basket of currencies, strengthened after a report showed new home sales in April rose more than expected and the month earlier figures were revised higher, buoying optimism about a revival in the world's largest economy following weaker data in the first quarter due to harsh winter weather. Conversely, some investors pulled back their expectations for a higher kiwi on concern the elevated level of the local currency doesn't reflect a decline in dairy commodity prices.

"We are overdue for some continued US dollar strength. The US data generally has been quite good to counteract the weak data in the first quarter and we should have some exceptionally strong data going forward," said Martin Rudings, senior adviser at OMF. "While we have been attractive to investors offshore because of the high yield, I think the uncertainty about commodity prices is starting to filter through. A lot of offshore people are very long New Zealand dollars and I think as soon as there is some doubt, they start to scramble out. Dairy prices have probably got a little bit further downside in them."

The kiwi may trade in a tight range of 85.10 US cents to 85.70 cents today, Rudings said. US financial markets are closed for the Memorial Day holiday today while the UK has a bank holiday.

In New Zealand today, traders will be eyeing data on the latest trade balance, scheduled for release at 10:45am.

The New Zealand dollar slipped to 92.40 Australian cents at 8am from 92.63 cents at 5pm on Friday, weakened to 62.64 euro cents from 62.73 cents, edged lower to 50.69 British pence from 50.75 pence and slipped to 87.08 yen from 87.13 yen.

(BusinessDesk)

© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

Scoop Business: Leighton-Led WGP To Build, Manage Transmission Gully

The Wellington Gateway Partnership, led by a unit of ASX-listed Leighton Holdings, has won the $1 billion contract to build the Transmission Gully road north of Wellington. More>>

ALSO:

Gareth Morgan: The Government’s Fresh Water Policy – Revisited

Fresh water quality is the latest area to be in the sights of Gareth Morgan and his research organisation The Morgan Foundation... They found that the fresh water policy was a bit murkier than the Environment Minister let on. More>>

ALSO:

Interest Rates: RBNZ Hikes OCR To 3.5%, ‘Period Of Assessment’ Now Needed

Reserve Bank governor Graeme Wheeler raised the official cash rate as expected, while signalling a pause in rate hikes to assess the impact of moves so far this year. The kiwi dollar sank after Wheeler said its strength was “unjustified” and that the currency could have “a significant fall.” More>>

ALSO:

Fonterra: Canpac Site 'Resize' To Focus More On Paediatrics

Fonterra is looking at realigning its packing operations at Canpac, in the Waikato, to focus more on paediatric nutritionals... The proposed changes could mean around 110 roles may not be required at the site which currently employs 330. More>>

ALSO:

Scoop Business: Postie Plus Brand Gets 2nd Chance With Well-Funded Pepkor

The Postie Plus brand is getting a new lease of life after South Africa’s Pepkor bought the failed retailer’s assets out of administration and said it will use its purchasing power to reduce costs of stock and fatten margins. More>>

ALSO:

Warming: Warming Signs From State Of Climate Report

Climate data from air, land, sea and ice in 2013 'reflect trends of a warming planet' -- says the latest State of the Climate report, launched by U.S. and New Zealand scientists. More>>

ALSO:

Get More From Scoop

 
 
Computer Power Plus

Standards New Zealand

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