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

 


NZ dollar TWI slips from record as 1Q GDP misses estimate

NZ dollar TWI slips from record on slower quarterly growth than expected

By Suze Metherell

June,19 (BusinessDesk) - The trade-weighted index of the New Zealand dollar, or TWI, declined from a record after government data showed slower than expected economic growth in the first quarter.

The TWI fell to 81.08 5pm in Wellington from a record 81.29 before the release, though was still up from 80.82 yesterday. The kiwi slipped to 87.13 US cents at 5pm from 87.23 cents at 8am this morning, paring gains from 86.58 cents at 5pm yesterday.

New Zealand's gross domestic product grew 1 percent in the three months ended March 31, from an upwardly revised 1 percent gain in the fourth quarter, slightly below the Reserve Bank's 1.1 percent expectation and the 1.2 percent expected in a Reuters poll of economists. Still, the economy grew 3.3 percent in the year ended March 31, ahead of a forecast 3.1 percent and supporting the central bank’s view that it must press on with interest rate increases to keep inflation at bay.

"Initially the headline number looked like it was less than expected, but it was sort of backward revisions which helped lift things a little," said Alex Hall, head of dealing at HiFX. "The TWI keeps climbing and is a difficult one to contain."

Before the local data, demand for the US dollar declined after the Federal Reserve revised 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.

"Today is all about the US story and the Fed tapering more as expected and everything is strengthened more against the dollar again," HiFX's Hill said. "From a kiwi perspective, markets will be watching very closely if it gets above 87.50 US cents again. It looks more likely than not at the moment, because it has stayed so elevated for so long."

The kiwi fell to 92.64 Australian cents at 5pm from 92.82 cents this morning, and 92.74 cents yesterday. The local currency edged lower to 88.81 yen from 88.89 yen at 8am and was up from 88.55 yen yesterday.

The New Zealand dollar was little changed at 51.27 British pence from 51.33 pence this morning, and up from 51.05 pence yesterday and traded at 64.11 euro cents from 64.19 cents this morning, and 63.92 cents yesterday.

(BusinessDesk)

© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

Hager Raid: Westpac Wrong To Release Bank Records To Police

The Privacy Commissioner has censured Westpac Banking Corp for releasing without a court order more than 10 months of bank records belonging to the political activist and journalist Nicky Hager during a police investigation into leaked information published in Hager's 2014 pre-election book, 'Dirty Politics'. More>>

ALSO:

EARLIER:

Crown Accounts: Government Ekes Out Six-Month Surplus Of $9M

The New Zealand government eked out a tiny surplus in the first six months of the fiscal year as growth in domestic consumption lifted the goods and services tax take, while uncertainties over the Kaikoura earthquake costs meant expenses were less than expected. More>>

ALSO:

Almost 400 Jobs: Shock At Cadbury's Dunedin Factory Closure

Workers at Cadbury in Dunedin are reeling after learning this morning that the iconic Cadbury factory is to close, with the loss of almost 400 jobs... “The company had reported it was doing well and this has come out of the blue,” says Chas. More>>

ALSO:

Transport: Boards Of Inquiry For Auckland Roading Projects

Boards of Inquiry have been appointed to decide on two significant Auckland roading projects in a move which will get a decision by the end of the year, Environment Minister Dr Nick Smith and Conservation Minister Maggie Barry announced today. More>>

ALSO:

Get More From Scoop

 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news