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

 

Housing: Affordability Drops 14%, Driven By Auckland Prices

Housing affordability across New Zealand fell 14 percent in the year ending November 2014, with Auckland’s lack of affordability set to reach levels it hit during the height of the global financial crisis, according to the latest Massey University Home Affordability Report More>>

ALSO:

The Dry: Fonterra Drops Forecast Milk Volumes By 3.3 Percent

Fonterra Cooperative Group, the worlds largest dairy exporter, reduced its milk volume forecast for the 2014-2015 season by 3.3 per cent due to the impact of dry weather on production in recent weeks. More>>

ALSO:

Strike: Lyttelton Port Workers Vote To Escalate Dispute

Members of the Rail and Maritime Transport Union (RMTU) at Lyttelton Port today voted to escalate their industrial action. Around 200 RMTU members have been operating an overtime ban since 17 December and today they endorsed a series of full withdrawals of labour at the port. More>>

ALSO:

Scoop Business: NZ Dollar Falls To 3-Year Low As Investors Favour Greenback

The New Zealand dollar fell to its lowest in more than three years as investors sold euro and bought US dollars, weakening other currencies against the greenback. More>>

ALSO:

Scoop Business: NZ Govt Operating Deficit Smaller Than Expected

The New Zealand’s government’s operating deficit was smaller than expected in the first five months of the financial year as a clampdown on expenditure managed to offset a shortfall in the tax-take from last month’s forecast. More>>

ALSO:

0.8 Percent Annually:
NZ Inflation Falls Below RBNZ's Target

New Zealand's annual pace of inflation slowed to below the Reserve Bank's target band in the final three months of the year, giving governor Graeme Wheeler more room to keep the benchmark interest rate lower for longer.More>>

ALSO:

Get More From Scoop

 
 
Standards New Zealand

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