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

 


NZ dollar falls to 3-month low as investors trim rate bets

NZ dollar falls to 3-month low as investors pull back bets on rate hikes

By Tina Morrison

June 3 (BusinessDesk) - The New Zealand dollar fell to a three-month low as investors pulled back their expectations for future interest rate increases, decreasing the lure of the local currency.

The kiwi touched 84.37 US cents, and was trading at 84.50 cents at 8am in Wellington from 84.68 cents at 5pm yesterday when local banks were closed for the Queens Birthday public holiday.

The New Zealand dollar has declined 2.6 percent the past month as investors pared pack their expectations for the pace of interest rate increases on concern that falling commodity prices may dent economic growth after Fonterra Cooperative Group reduced its forecast payout to dairy farmers. Reserve Bank governor Graeme Wheeler has said he may intervene to sell the local currency should it fail to reflect softer commodity prices.

"The New Zealand dollar has come off the boil," said Peter Cavanaugh, client advisor at Bancorp Treasury Services. "The markets are digesting comments from the Reserve Bank and even though they expect them to raise the cash rate next week, they will probably tone down the rhetoric and slow down the path for rate rises. The market in March was confidently predicting a rate rise in July and now you would have to say that's much less likely."

The Reserve Bank is expected to increase the official cash rate a quarter point at its June 12 meeting. Traders have pulled back their expectations for interest rate hikes over the coming year to 75 basis points from 92 points a month ago, according to the Overnight Swap Curve.

Today, the focus will be on first quarter terms of trade data scheduled for release at 10:45am.

The New Zealand dollar slipped to 91.36 Australian cents from 91.45 cents yesterday ahead of the Australian Reserve Bank decision on interest rates this afternoon.

The kiwi was little changed at 62.14 euro cents from 62.13 cents yesterday, edged lower to 50.44 British pence from 50.57 pence and advanced to 86.54 yen from 86.38 yen.

(BusinessDesk)

© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

Must Sell 20 Petrol Stations: Z Cleared To Buy Caltex Assets

Z Energy is allowed to buy the Caltex and Challenge! petrol station chains but must sell 19 of its retail sites and one truck-stop, the Commerce Commission has ruled in a split decision that acknowledges possible retail price coordination between fuel retailers occurs in some regions. More>>

ALSO:

Huntly: Genesis Extends Life Of Coal-Fuelled Power Station To 2022

Genesis Energy will keep its two coal and gas-fired units at Huntly Power Station operating until 2022, having previously said they'd be closed by 2018, after wringing a high price from other electricity generators who wanted to keep them as back-up. More>>

ALSO:

Dammed If You Do: Ruataniwha Irrigation Scheme Hits Farmer Uptake Targets

Enough Hawke's Bay farmers have signed up for water from the proposed Ruataniwha Water Storage Scheme for it to go ahead as long as a cornerstone institutional capital investor can be found to back it, its regional council promoter announced. More>>

ALSO:

Reserve Bank: OCR Stays At 2.25%

Reserve Bank governor Graeme Wheeler kept the official cash rate at 2.25 percent, in a decision traders had said could go either way, while predicting inflation will pick up as the slump in oil prices washes out of the data and capacity pressures start to build in the economy. More>>

ALSO:

Export Values Down: NZ Posts Biggest Annual Trade Deficit In 7 Years

New Zealand has recorded its biggest annual trade deficit since April 2009, reflecting weaker prices of agricultural commodities such as dairy products, beef and lamb, and increased imports of vehicles and machinery. More>>

ALSO:

Currency Events: NZ's New $5 Note Wins International Banknote Award

New Zealand’s new Brighter Money $5 note has been named Banknote of the Year in a prestigious international competition. The $5 note was awarded the IBNS Banknote of the Year title at the International Bank Note Society’s annual meeting. More>>

ALSO:

Get More From Scoop

 
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news