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

 


NZ dollar jumps above 87 US cents as Fed lowers growth path

NZ dollar jumps above 87 US cents after Fed lowers growth outlook

By Tina Morrison

June 19 (BusinessDesk) - The New Zealand dollar jumped above 87 US cents after the Federal Reserve lowered its US growth and long-term interest rate projections, damping demand for the greenback.

The kiwi spiked from 86.77 US cents immediately before the Federal Open Market Committee's statement at 6am New Zealand time to trade at 87.23 cents at 8am, from 86.58 cents at 5pm yesterday. The trade-weighted index surged to a record 81.27 from 80.82 yesterday.

The FOMC, following its regular two-day meeting, cut its forecast for US economic growth in 2014 to between 2.1 percent and 2.3 percent, from an earlier forecast of around 2.8 percent to 3 percent, and lowered its projections for long-term interest rates by about 25 basis points. Offsetting the lower long-term rates, the Fed increased its short-term rate hike expectations for 2015 and 2016 and reduced its monthly bond-buying programme.

"The FOMC was a slight negative for US interest rates and therefore the US dollar and therefore higher for kiwi/US," said Imre Speizer, Westpac Banking Corp senior market strategist in New Zealand. "US interest rates fell because the interest rate projections were changed. Lower long-run growth is translating into lower long-run interest rates and therefore a lower US dollar."

Later this morning, data is released on first quarter GDP with economists polled by Reuters expecting a gain of 1.2 percent from the previous quarter for an annual average rate of 3.1 percent.

The kiwi will probably remain elevated today, said Speizer.

The New Zealand dollar jumped to 51.33 British pence from 51.05 pence yesterday. The pound weakened after the release of the Bank of England minutes from its meeting this month, which showed officials wanted to see more evidence of economic slack being absorbed before raising rates.

The UK publishes retail sales for May tonight.

The kiwi jumped to 88.89 yen from 88.55 yen yesterday, gained to 92.82 Australian cents from 92.74 cents and increased to 64.19 euro cents from 63.92 cents.

(BusinessDesk)

© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

Restrictions Lifted: No Further Tau Flies Found

The Ministry for Primary Industries (MPI) confirms that all restrictions on the movement of fruit and vegetables in Manurewa, Auckland, due to the Tau fly, have been lifted as of 2.26pm on Sunday 7 February. More>>

Crowdfinding: Awaroa Beach To Become Public Land If Appeal Succeeds

Conservation Minister Maggie Barry says a privately-owned beach will become part of the Abel Tasman National Park if an online crowdfunding campaign to buy it succeeds... More>>

ALSO:

Meat Workers Union: Waitangi Mondayisation Flaunted By Large Employer Of Maori

At the AFFCO Talley owned meat plant in Rangiuru, the company has resorted to bullying and threats... saying they could be disciplined and their union sued for an unlawful strike if workers exercise their rights to a paid day off tomorrow. More>>

Earlier:

ETS Review: Modelling Documents Released

Three technical documents are being released to help New Zealanders engage with the Emissions Trading Scheme (ETS) review, Climate Change Minister Paula Bennett says. More>>

ALSO:

Northland: Govt Plan Targets Transport, Web, Maori Assets

The government has released a 10-year plan to attract investors and lift economic growth in Northland, a region that perennially underperforms the rest of the country even while being endowed with natural beauty, productive land, minerals, a potential workforce, scope for manufacturing, forestry and aquaculture, and proximity to Auckland. More>>

ALSO:

Statistics: Unemployment Rate Falls To 5.3 Percent

The unemployment rate fell to 5.3 percent in the December 2015 quarter (from 6.0 percent), Statistics New Zealand said today. This is the lowest unemployment rate since March 2009. There were 16,000 fewer people unemployed than in the September ... More>>

ALSO:

Get More From Scoop

 
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news