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

 


NZ dollar weakens as US interest rates seen rising

NZ dollar weakens on speculation US interest rates may rise earlier than forecast

By Tina Morrison

June 10 (BusinessDesk) - The New Zealand dollar weakened on the suggestion US interest rates may rise sooner than previously expected, boosting demand for the greenback.

The kiwi slipped to 84.88 US cents at 8am from 85.13 cents at 5pm yesterday. The trade-weighted index dropped to 79.19 from 79.36 yesterday.

The US dollar index, which measures the greenback against a basket of currencies, rose after St. Louis Federal Reserve Bank president James Bullard said if the US economy continues to improve at its current pace, sentiment will likely move to an earlier rate hike. Bullard, speaking to reporters following a speech to the Tennessee Bankers Association, said he currently forecasts the first rate hike to come in the first quarter of 2015 but he may bring that expectation forward as he prepares his June contribution for the Fed. He is not a voter on the Federal Reserve Open Market Committee this year.

The kiwi weakened because of "the Bullard comments which are talking about higher US rates sooner rather than later," said Tim Kelleher, head of institutional FX sales New Zealand for ASB Bank. "The central bank may raise rates sooner than many now think is what he said, which is US dollar positive."

In New Zealand today, economists will be eyeing the quarterly manufacturing sales data scheduled for release at 10:45am as they prepare their forecasts for first quarter GDP.

In Australia, the focus will be on the latest NAB business confidence survey due at 1:30pm New Zealand time. Australia also has reports on job advertisements and home loans.

Traders will also be watching for Chinese data on inflation and the producers price index as they gauge the strength of New Zealand's largest trading partner. Overnight, the People's Bank of China said it would reduce the amount of cash reserves that must be held by banks that mainly lend to small business and rural borrowers.

The New Zealand dollar fell to 90.64 Australian cents from 91.02 cents yesterday.

The kiwi was little changed at 62.42 euro cents from 62.40 cents yesterday and edged lower to 50.51 British pence from 50.65 pence ahead of data on UK industrial production. The local currency slipped to 86.98 yen from 87.29 yen yesterday.

(BusinessDesk)

© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

Gordon Campbell: On Tiwai Point (And Saying “No” In Greece)

Its hard to see how Rio Tinto’s one month delay in announcing its intentions about the Tiwai Point aluminium smelter is a good sign for (a) the jobs of the workers affected or (b) for the New Zealand taxpayer. More>>

ALSO:

Half Empty: Dairy Product Prices Extend Slide To Six-Year Low

Dairy product prices continued their slide, paced by whole milk power, in the latest GlobalDairyTrade auction, weakening to the lowest level in six years. More>>

ALSO:

Copper Broadband: Regulator Set To Keep Chorus Pricing Largely Unchanged

The Commerce Commission looks likely to settle on a price close to its original decision on what telecommunications network operator Chorus can charge its customers, though it probably won’t backdate any update. More>>

ALSO:

Lower Levy For Safer Cars: ACC Backtracks On Safety Assessments

Dog and Lemon: “The ACC has based the entire levy system on a set of badly flawed data from Monash University. This Monash data is riddled with errors and false assumptions; that’s the real reason for the multiple mistakes in setting ACC levies.” More>>

ALSO:

Fast Track: TPP Negotiations Set To Accelerate, Groser Says

Negotiations for the Trans-Pacific Partnership will accelerate in July, with New Zealand officials working to stitch up a deal by the month's end, according to Trade Minister Tim Groser. More>>

ALSO:

Floods: Initial Assessment Of Economic Impact

Authorities around the region have compiled an initial impact assessment for the Ministry of Civil Defence, putting the estimated cost of flood recovery at around $120 million... this early estimate includes social, built, and economic costs to business, but doesn’t include costs to the rural sector. More>>

ALSO:

Get More From Scoop

 
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news