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


New Zealand dollar falls on US rate hike speculation

New Zealand dollar falls on US rate hike speculation

By Suze Metherell

July 7 (BusinessDesk) - The New Zealand dollar fell after last week's strong US employment data stoked market speculation the Federal Reserve will move to hike interest rates sooner than expected.

The kiwi was 87.18 US cents at 5pm in Wellington, from 87.38 cents at New York close and 87.49 cents at 5pm on Friday. The trade-weighted index fell to 81.21, a five-day low, from 81.30 at the New York close.

The US dollar strengthened after US Labor Department figures on Thursday showed 288,000 jobs were added in June, exceeding the 215,000 the market was expecting, while unemployment dropped to 6.1 percent from 6.3 percent in May. The accelerating recovery of the world's biggest economy has fuelled expectations among traders that Fed chair Janet Yellen will hike interest rates sooner than anticipated.

"Until that payrolls number came out the sense was that the Fed was likely to maintain interest rates at a very low level, and have an extended period of low interest rates," said Garry Dean, a trader at CMC Markets. "The market is feeling that the pressure is going to start to come on Janet Yellen, she might need to satisfy the market and start looking at bringing forward interest rate rises, which is why, of course, the US dollar has begun to rise."

Minutes for the June meeting of the Federal Reserve are scheduled to be published on Wednesday in Washington, giving the market more insight into the policymaker's outlook.

A BusinessDesk survey of 10 traders and strategists predicts the kiwi may trade between 86.40 US cents and 88.50 cents this week. Six predict the kiwi will fall this week, while two expect it to gain and two say it will likely remain largely unchanged.

"The market is following on from that payroll data, we saw the US dollar close the week on bid tone and that's really followed through and traders are wondering if early on the week we might just get a continuation of that US dollar strength," CMC's Dean said. The kiwi was currently supported at 87 US cents, he said.

The New Zealand dollar edged lower to 93.14 Australian cents at 5pm in Wellington, from 93.21 cents at New York close. CMC's Dean said Thursday employment figures across the Tasman are likely to move the Australian dollar.

The local currency dropped to 89.01 yen, from 89.21 at the New York close and was little changed at 50.85 British pence, from 50.92 pence last week. The kiwi slipped to 64.18 Euro cents, from 64.26 cents.


© Scoop Media

Business Headlines | Sci-Tech Headlines


Trade: NZ Trade Deficit Widens To A Record In September

Oct. 27 (BusinessDesk) - New Zealand's monthly trade deficit widened to a record in September as meat exports dropped to their lowest level in more than three years. More>>


Animal Welfare: Cruel Practices Condemned By DairyNZ Chief

DairyNZ chief executive Tim Mackle says cruel and illegal practices are not in any way condoned or accepted by the industry as part of dairy farming.

Tim says the video released today by Farmwatch shows some footage of transport companies and their workers, as well as some unacceptable behaviour by farmers of dragging calves. More>>


Postnatal Depression: 'The Thief That Steals Motherhood' - Alison McCulloch

Post-natal depression is a sly and cruel illness, described by one expert as ‘the thief that steals motherhood’, it creeps up on its victims, hiding behind the stress and exhaustion of being a new parent, catching many women unaware and unprepared. More>>


DIY: Kiwi Ingenuity And Masking Tape Saves Chick

Kiwi ingenuity and masking tape has saved a Kiwi chick after its egg was badly damaged endangering the chick's life. The egg was delivered to Kiwi Encounter at Rainbow Springs in Rotorua 14 days ago by a DOC worker with a large hole in its shell and against all odds has just successfully hatched. More>>


International Trade: Key To Lead Mission To India; ASEAN FTA Review Announced

Prime Minister John Key will lead a trade delegation to India next week, saying the pursuit of a free trade agreement with the protectionist giant is "the primary reason we're going" but playing down the likelihood of early progress. More>>



MYOB: Digital Signatures Go Live

From today, Inland Revenue will begin accepting “digital signatures”, saving businesses and their accountants a huge amount of administration time and further reducing the need for pen and paper in the workplace. More>>

Oil Searches: Norway's Statoil Quits Reinga Basin

Statoil, the Norwegian state-owned oil company, has given up oil and gas exploration in Northland's Reinga Basin, saying the probably of a find was 'too low'. More>>


Modern Living: Auckland Development Blowouts Reminiscent Of Run Up To GFC

The collapse of property developments in Auckland is "almost groundhog day" to the run-up of the global financial crisis in 2007/2008 as banks refuse to fund projects due to blowouts in construction and labour costs, says John Kensington, the author of KPMG's Financial Institutions Performance Survey. More>>


Get More From Scoop

Search Scoop  
Powered by Vodafone
NZ independent news