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

 


NZ dollar may fall on ECB moves

NZ dollar may extend decline as prospect of ECB stimulus fuels greenback

By Paul McBeth

May 29 (BusinessDesk) - The New Zealand dollar may extend its decline as the prospect of European Central Bank stimulus next week stokes demand for the greenback, while sliding business confidence locally saps demand for the kiwi.

The local currency fell to,84.80 US cents at 5pm in Wellington from 84.95 cents at 8am and 85.36 cents yesterday. The trade-weighted index dropped to 79.17 from 79.71 yesterday.

The kiwi fell to a two-month low 84.68 US cents yesterday after the greenback rallied on weak German employment data, which heightened speculation the ECB will stimulate the regional economy when it reviews monetary policy next week. The local currency came under pressure after a survey showed New Zealand business confidence fell for a third month, the same day Fonterra Cooperative Group cut its forecast payout to farmers on declining dairy prices.

"The market is looking to sell the kiwi and is looking for excuses," said Imre Speizer, market strategist at Westpac Banking Corp in Auckland. "I don't think that's going to change until the 12th of June when the Reserve Bank meeting, which I think will turn it around."

Traders are expecting central bank governor Graeme Wheeler to revise down the forecast track of interest rate increases, though a weaker kiwi, strong migration flows and fiscal stimulus are being ignored, Speizer said.

The kiwi fell to 91.37 Australian cents at 5pm in Wellington from 92.18 cents yesterday after Australian government figures showed future capital expenditure intentions were ahead of expectations.

Traders will be watching for the second estimate of US gross domestic product in the first three months of the year to gauge the strength of the world's biggest economy.

The local currency dropped to 86.23 yen at 5pm in Wellington from 87.03 yen yesterday, and fell to 62.30 euro cents from 62.64 cents. It declined to 50.68 British pence from 50.78 pence yesterday.

(BusinessDesk)

© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

Wood Producers: Crisis In New Zealand Log Supply

New Zealand wood processing leaders held a hui with senior government officials and political leaders in Whangarei yesterday to assess the acute log supply shortage to local mills in Northland. More>>

Consents And Taxes: Trustpower 'Very Disappointed' With Judgement

Trustpower is "very disappointed" with a Supreme Court ruling dismissing its bid to claim tax deductions on $17.7 million of project costs in a case closely watched by large-scale infrastructure developers. More>>

ALSO:

Fruitful Endeavours: Kiwifruit Exports Reach Record Levels

In June 2016, kiwifruit exports rose $105 million (47 percent) from June 2015 to reach $331 million, Statistics New Zealand said today. Overall, goods exports rose $109 million (2.6 percent) in June 2016 (to $4.3 billion). More>>

ALSO:

Economic Update: RBNZ Says Rate Cut Seems Likely

The Reserve Bank will likely cut interest rates further as a persistently strong kiwi dollar makes it difficult for the bank to meet its inflation target, it said. The local currency fell. More>>

ALSO:

House Price Action Plan: RBNZ Signals National Lending Restrictions

The central bank wants to cap bank lending to property investors with a deposit of less than 40 percent at 5 percent and restore the 10 percent limit for owner-occupiers wanting to take out a mortgage with a deposit of less than 20 percent, according to a consultation paper released today. More>>

ALSO:

Get More From Scoop

 
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news