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

 


NZ Dollar Outlook: Traders split on direction for kiwi

NZ Dollar Outlook: Traders split on direction for kiwi this week

By Tina Morrison

June 23 (BusinessDesk) - The New Zealand dollar may struggle for direction this week as traders weigh the latest overseas and local growth indicators.

The local currency may trade between 85 US cents and 88.20 cents this week, according to a BusinessDesk survey of 10 traders and strategists, who are split on the kiwi's trajectory this week. Four expect the currency to decline, three predict it will gain and three pick it to remain largely unchanged. It recently traded at 87.19 US cents.

New Zealand's economic strength and rising interest rates mean the nation's currency remains in demand with international investors seeking higher yields, even as the Reserve Bank says softer commodity prices should be weighing on the kiwi. Meantime in the US, a faltering economic recovery will probably see first quarter GDP revised down by as much as negative 2 percent, from an initial estimate of negative 1 percent, analysts said.

"We are raising interest rates and we have got more interest rate increases to come yet," said Derek Rankin, director at Rankin Treasury Advisory. "We have got a rising tide. Offshore investment is just seeping in gradually into New Zealand. The New Zealand dollar is going to gradually creep higher. Yield demand is going to be a constant driver, it's not really going to go away."

In the US this week, all eyes will be on the first quarter GDP data on Wednesday and a May inflation indicator on Thursday, which is followed by the Federal Reserve.

Rankin said US economic data has been distorted by severe winter weather and a drought on the west coast.

"I am on the side of the fence that it is actually worse than it should be, it is not just the weather," Rankin said. "I think the US economy is actually struggling to get lift off and the reason for that is because people aren't getting paid any more."

In New Zealand this week, the overseas merchandise trade balance is scheduled for release on Friday, with some analysts saying it may start to show the effect of falling commodity prices.

Elsewhere, the German IFO business confidence survey released tomorrow will be watched for signs of sentiment in Europe.

China's flash HSBC PMI manufacturing data released today improved more than expected to 50.8 from 49.4 last month, compared with forecasts of 49.7. A reading above 50 indicates expansion. Eurozone and US PMIs are released tonight.

(BusinessDesk)

© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

RMTU: Mediation Between Lyttelton Port And Union Fails

The Rail and Maritime Union (RMTU) has opted to continue its overtime ban indefinitely after mediation with the Lyttelton Port of Christchurch (LPC) failed to progress collective bargaining. More>>

Earlier:

Science Policy: Callaghan, NSC Funding Knocked In Submissions

Callaghan Innovation, which was last year allocated a budget of $566 million over four years to dish out research and development grants, and the National Science Challenges attracted criticism in submissions on the government’s draft national statement of science investment, with science funding largely seen as too fragmented. More>>

ALSO:

Scoop Business: Spark, Voda And Telstra To Lay New Trans-Tasman Cable

Spark New Zealand and Vodafone, New Zealand’s two dominant telecommunications providers, in partnership with Australian provider Telstra, will spend US$70 million building a trans-Tasman submarine cable to bolster broadband traffic between the neighbouring countries and the rest of the world. More>>

ALSO:

More:

Statistics: Current Account Deficit Widens

New Zealand's annual current account deficit was $6.1 billion (2.6 percent of GDP) for the year ended September 2014. This compares with a deficit of $5.8 billion (2.5 percent of GDP) for the year ended June 2014. More>>

ALSO:

Still In The Red: NZ Govt Shunts Out Surplus To 2016

The New Zealand government has pushed out its targeted return to surplus for a year as falling dairy prices and a low inflation environment has kept a lid on its rising tax take, but is still dangling a possible tax cut in 2017, the next election year and promising to try and achieve the surplus pledge on which it campaigned for election in September. More>>

ALSO:

Job Insecurity: Time For Jobs That Count In The Meat Industry

“Meat Workers face it all”, says Graham Cooke, Meat Workers Union National Secretary. “Seasonal work, dangerous jobs, casual and zero hours contracts, and increasing pressure on workers to join non-union individual agreements. More>>

ALSO:

Get More From Scoop

 
 
Standards New Zealand

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