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

 


NZ dollar heads for 0.4% weekly decline

NZ dollar heads for 0.4% weekly decline as falling dairy payout, rate hike view weighs

By Paul McBeth

May 30 (BusinessDesk) - The New Zealand dollar is heading for a 0.4 percent weekly decline against the greenback after a cut in the forecast payout to local dairy farmers and growing expectations for a slower track of interest rate hikes saps demand for the kiwi.

The local currency fell to 85.06 US cents at 5pm in Wellington from 85.39 cents on Friday in New York last week. It traded at 84.71 cents at 8am and 84.80 cents yesterday. The trade-weighted index declined to 79.30 from 79.18 yesterday, and is heading for a 0.8 percent weekly drop.

A BusinessDesk survey of 10 traders and strategists on Monday predicted the local currency would trade between 84.30 US cents and 86.50 cents this week. Seven predicted the kiwi would fall this week, and three expected it to increase.

Investors are losing their ebullience over the strength of New Zealand's economic growth as falling dairy prices prompted Fonterra Cooperative Group to cut its forecast payout to farmers, and feeds into dwindling business confidence. The prospect of slower growth and tepid inflation has prompted traders to pare their bets on the Reserve Bank's interest rate track, and investors have priced in 75 basis points of increases over the coming 12 months, according to the Overnight Index Swap curve, down from 84 basis points a week ago. Governor Graeme Wheeler will review the official cash rate on June 12.

"There's a groundswell of opinion that the Reserve Bank is going to pause, we just need him to open his mouth," said Alex Hill, head of dealing at HiFX in Auckland. "The question remains for the weekend, can the kiwi settle below that 85.20 (US cents) level - if it closes above it's a false break."

Government figures showed New Zealand building consents fell a seasonally adjusted 5.2 percent in April as the public holidays slowed activity.

The local currency fell to 91.21 Australian cents from 91.37 cents yesterday as a reduced interest rate differential dents the attractiveness of the kiwi. Strong future capital expenditure intentions yesterday helped underpin support for the Australian currency, which also rallied on a weak US gross domestic product estimate.

New Zealand's currency gained to 86.39 yen at 5pm in Wellington from 86.25 yen yesterday, and advanced to 62.50 euro cents from 62.33 cents. It edged up to 50.81 British pence from 50.70 pence yesterday.

(BusinessDesk)

© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

Sky City : Auckland Convention Centre Cost Jumps By A Fifth

SkyCity Entertainment Group, the casino and hotel operator, is in talks with the government on how to fund the increased cost of as much as $130 million to build an international convention centre in downtown Auckland, with further gambling concessions ruled out. The Auckland-based company has increased its estimate to build the centre to between $470 million and $530 million as the construction boom across the country drives up building costs and design changes add to the bill.
More>>

ALSO:

RMTU: Mediation Between Lyttelton Port And Union Fails

The Rail and Maritime Union (RMTU) has opted to continue its overtime ban indefinitely after mediation with the Lyttelton Port of Christchurch (LPC) failed to progress collective bargaining. More>>

Earlier:

Science Policy: Callaghan, NSC Funding Knocked In Submissions

Callaghan Innovation, which was last year allocated a budget of $566 million over four years to dish out research and development grants, and the National Science Challenges attracted criticism in submissions on the government’s draft national statement of science investment, with science funding largely seen as too fragmented. More>>

ALSO:

Scoop Business: Spark, Voda And Telstra To Lay New Trans-Tasman Cable

Spark New Zealand and Vodafone, New Zealand’s two dominant telecommunications providers, in partnership with Australian provider Telstra, will spend US$70 million building a trans-Tasman submarine cable to bolster broadband traffic between the neighbouring countries and the rest of the world. More>>

ALSO:

More:

Statistics: Current Account Deficit Widens

New Zealand's annual current account deficit was $6.1 billion (2.6 percent of GDP) for the year ended September 2014. This compares with a deficit of $5.8 billion (2.5 percent of GDP) for the year ended June 2014. More>>

ALSO:

Still In The Red: NZ Govt Shunts Out Surplus To 2016

The New Zealand government has pushed out its targeted return to surplus for a year as falling dairy prices and a low inflation environment has kept a lid on its rising tax take, but is still dangling a possible tax cut in 2017, the next election year and promising to try and achieve the surplus pledge on which it campaigned for election in September. More>>

ALSO:

Job Insecurity: Time For Jobs That Count In The Meat Industry

“Meat Workers face it all”, says Graham Cooke, Meat Workers Union National Secretary. “Seasonal work, dangerous jobs, casual and zero hours contracts, and increasing pressure on workers to join non-union individual agreements. More>>

ALSO:

Get More From Scoop

 
 
Standards New Zealand

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