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

 


NZ Dollar Outlook: Kiwi may decline as greenback strengthens

NZ Dollar Outlook: Kiwi may decline as greenback strengthens after US employment data

By Tina Morrison

July 7 (BusinessDesk) - The New Zealand dollar may decline after failing to make a break through 88 US cents in the past two weeks and in the absence of local data to push it higher as the US dollar strengthens.

The kiwi may trade between 86.40 US cents and 88.50 cents this week, according to a BusinessDesk survey of 10 traders and strategists. Six predict the kiwi will fall this week, while two expect it to gain and two say it will likely remain largely unchanged. It recently traded at 87.17 US cents.

The New Zealand dollar has gained more than 5 cents against the US dollar this year as a buoyant local economy pushes interest rates higher. However in the past fortnight the kiwi has failed to push through 88 US cents after touching a three-year high of 87.94 cents on June 27, within sights of its August 2011 post-float high of 88.40 cents. Optimism has faded about further upside for the kiwi this week after a US employment report beat expectations last week, boosting sentiment about a revival in the world's largest economy.

"Kiwi has failed to break above 88 over the past two weeks and so there is a little bit of momentum lost on that uptrend and there doesn't seem to be much on the data calendar that could really provoke potentially a test of 88, let alone a test of 88.40," said Bank of New Zealand currency strategist Raiko Shareef. "The data in New Zealand does seem to be slowing a little. The other side of the coin is the fact that last week's US employment report was very positive. That's really given the US dollar bulls a little bit more to go on having been pretty discouraged over the past month or so."

In New Zealand this week, traders will be eyeing the New Zealand Institute of Economic Research second quarter survey of business opinion, scheduled for release tomorrow. The measure will probably hold up as it doesn't cover the rural sector and therefore won't capture recent weakness in the terms of trade, said the BNZ's Shareef. As it isn't a leading indicator, its impact on the currency will probably be limited, he said.

Reserve Bank governor Graeme Wheeler is to give an off-the-record speech at a business breakfast in Auckland tomorrow and deputy governor John McDermott is scheduled to speak to the Wellington Employers' Chamber of Commerce on Wednesday, considering the concept of potential output and its place in the monetary policy framework of an inflation targeting central bank. McDermott will also discuss broad drivers of growth in potential output and the best contribution that monetary policy can make towards strong growth.

New Zealand data out this week includes June electronic card transactions on Wednesday and the food price index on Friday.

On Thursday, the BNZ-Business NZ Performance of Manufacturing Index for June is scheduled for release. The PMI declined for a second consecutive month in May although it remained in expansion.

Elsewhere, the Federal Reserve publishes the minutes of its latest meeting on Wednesday, while the Bank of England is expected to keep its policy unchanged at a meeting on Thursday.

Australia has the NAB business confidence report for June tomorrow and the release of employment data on Thursday.

In China, reports on inflation and the producer price index for June are scheduled for release on Wednesday, while monetary aggregates and foreign trade for June are due for publication Thursday.

(BusinessDesk)

© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

Finance: Major Campaign To End "Gross Overtaxation Of Savings"

The campaign – which includes a special web site through which New Zealanders can e-mail their own and other MPs and party leaders – is backed by Age Concern, Consumer NZ, the Financial Services Council and the Taxpayers’ Union. More>>

ALSO:

Scoop Business: Leighton-Led WGP To Build, Manage Transmission Gully

The Wellington Gateway Partnership, led by a unit of ASX-listed Leighton Holdings, has won the $1 billion contract to build the Transmission Gully road north of Wellington. More>>

ALSO:

Gareth Morgan: The Government’s Fresh Water Policy – Revisited

Fresh water quality is the latest area to be in the sights of Gareth Morgan and his research organisation The Morgan Foundation... They found that the fresh water policy was a bit murkier than the Environment Minister let on. More>>

ALSO:

Interest Rates: RBNZ Hikes OCR To 3.5%, ‘Period Of Assessment’ Now Needed

Reserve Bank governor Graeme Wheeler raised the official cash rate as expected, while signalling a pause in rate hikes to assess the impact of moves so far this year. The kiwi dollar sank after Wheeler said its strength was “unjustified” and that the currency could have “a significant fall.” More>>

ALSO:

Fonterra: Canpac Site 'Resize' To Focus More On Paediatrics

Fonterra is looking at realigning its packing operations at Canpac, in the Waikato, to focus more on paediatric nutritionals... The proposed changes could mean around 110 roles may not be required at the site which currently employs 330. More>>

ALSO:

Scoop Business: Postie Plus Brand Gets 2nd Chance With Well-Funded Pepkor

The Postie Plus brand is getting a new lease of life after South Africa’s Pepkor bought the failed retailer’s assets out of administration and said it will use its purchasing power to reduce costs of stock and fatten margins. More>>

ALSO:

Get More From Scoop

 
 
Computer Power Plus

Standards New Zealand

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