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

 

NZ dollar slips below 87 US cents as US dollar rebounds

NZ dollar slips below 87 US cents as US dollar rebounds

By Tina Morrison

June 23 (BusinessDesk) - The New Zealand dollar slipped from its recent highs above 87 US cents as the US dollar rebounded during the weekend.

The kiwi softened to 86.93 US cents at 8am in Wellington, from 86.96 cents at the New York close and 87.20 cents in Wellington on Friday. The trade-weighted index edged lower to 81 from 81.04 on Friday.

The US dollar regained some ground following its slide after the Federal Reserve last week cut its forecast for US economic growth and lowered its projections for long-term interest rates, pushing New Zealand's trade-weighted currency index to a new record. Still, the kiwi is likely to remain supported as investors are drawn to the yield advantage offered by the nation's higher interest rates, analysts said.

The kiwi weakened "in response to the stronger US dollar over the weekend," said Peter Cavanaugh, client advisor at Bancorp Treasury Services. "It's a bit of a correction from the US dollar weakness after the Fed meeting. It's difficult to see it falling away."

Today, traders will be eyeing May migration data which is expected to continue to show fewer New Zealanders leaving and more returning from overseas, helping drive economic growth. The report will be released at 10:45am, while data on May credit card spending is published at 3pm.

Strong migration data was a key reason cited by the Reserve Bank this month for sticking to its plan to keep hiking interest rates. The bank has increased the benchmark rate three times so far this year.

Traders will also be keeping an eye on tensions in Iraq, where a flare up could cause a "flight to safety" in currency markets, Bancorp's Cavanaugh said. Safe haven buying usually supports stable currencies such as the yen and the Swiss franc as investors exit higher yielding currencies such as the kiwi.

China's flash HSBC PMI manufacturing data for May will be watched this afternoon for signs of how Asia's largest economy is tracking. The reading is expected to show a slight improvement to 49.7 from 49.4 last month. Eurozone and US PMIs are released tonight.

The New Zealand dollar was little changed at 51.07 British pence from 51.13 pence on Friday, at 63.97 euro cents from 63.98 cents, unchanged at 92.63 Australian cents and edged lower to 88.74 yen from 88.81 yen.

(BusinessDesk)

© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

Skodafone Goneski: Sky TV, Vodafone Drop $3.44 Billion Merger Plan

Sky Network Television and Vodafone New Zealand have terminated their merger agreement which aimed to create the country's largest telecommunications and media group, and have withdrawn an appeal against the Commerce Commission's rejection of the plan. More>>

Quake Insurance: Reforms To EQC Act Announced

· Increasing the monetary cap from $100,000 (plus GST) to $150,000 (plus GST) for EQC building cover.
· Clarifying EQC land cover is for natural disaster damage that directly affects the insured residence or access to it... More>>

ALSO:

Reserve Bank: Official Cash Rate Unchanged At 1.75 Percent

Global economic growth has increased and become more broad-based. However, major challenges remain with on-going surplus capacity and extensive political uncertainty... More>>

Kaikōura Earthquake: Private Insurers Receive $1.8b Claims

Insurance Council Chief Executive Tim Grafton said most is for commercial loss at $1.36 billion, with residential claims amounting to over $460 million. “...We have a high level of confidence that most people will have received settlement offers by the end of this year." More>>

ALSO:

Forms And Data: New Proposals To Simplify Personal Income Tax

The Government is proposing to make tax simpler for individuals, with people whose only income is from a salary, wages or investments no longer being required to file tax returns to receive tax refunds or to calculate any additional tax. More>>