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

 


Break below 0.8500 significant for Kiwi

Break below 0.8500 significant for Kiwi


By Garry Dean (Sales Trader, CMC Markets New Zealand)

Last week’s break below the key 0.8500 – 0.8515 support window was significant for the Kiwi, and this level is now expected to provide major topside resistance going forward. Monthly charts show a bearish key reversal in May, and we open below the 100-day moving average to start the week. While short-term support is seen at 0.8437 and 0.8405, the break below 0.8500 suggests downward momentum is building, and short-term strength is likely to encounter further selling back towards this level.

Last week’s massive slump in NZ business confidence followed on from a 4.4% slide in consumer confidence, and provided the impetus for the decline in the Kiwi. The Fonterra pay-out revision to $8.40 this season was largely expected, with the $7.00 starting point for next season reflecting the 23% fall we have seen in the past seven GlobalDairyTrade auctions. This is forecast to reduce farmer incomes by around $2.6 bio, and take around 1% off our annual GDP. No doubt this will be a major consideration for the RBNZ in the lead-up to the 12 June Monetary Policy Statement, with their economic projections and inflation forecasts both likely to be revised lower.

The NZD/AUD cross fell over 1% last week as the AUD surged on a sharp increase in business investment spending estimates for next year. The cross fell to a low of 0.9105, and revisited its 200-day moving average for the first time since mid-March last year. The RBA meet today, and with a tight fiscal budget, a slump in consumer confidence and a sharp decline in building approvals recently, they are likely to adopt a more dovish stance. The RBNZ however are still expected to hike rates a further 25pts in June, albeit with a likely reduction in the trail of rates going forward, and this widening interest differential should help support the cross. Indeed in an environment where central banks of developed nations remain focussed on keeping rates close to zero (the ECB are expected to cut again on Thursday night), the reaction to a further rate hike on 12 June by the RBNZ from foreign investors in search of yield will be a key theme in the second half of this month.

ends

© 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