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

 


NZ dollar tumbles on weak dairy prices, benign inflation

NZ dollar tumbles; weak dairy prices, benign inflation may slow rate hikes

By Jonathan Underhill

Jul. 16 (BusinessDesk) - The New Zealand dollar tumbled on speculation a slump in dairy prices and inflation data that’s weaker than expected will give the Reserve Bank more room to pause in its interest rate tightening cycle.

The kiwi dropped to 86.98 US cents at 5pm in Wellington, from 87.69 cents at the start of the day and down from 88.07 cents late yesterday. The trade-weighted index fell to 81.04 from 81.86 yesterday.

The local currency’s decline began after Federal Reserve chair Janet Yellen gave what was seen as a more upbeat account of the US economy and the kiwi remained low after the GDT Price Index, a measure of dairy prices, dropped 8.9 percent to the lowest level since December 2012 in the latest GlobalDairyTrade auction. It tumbled again after second-quarter consumer prices rose a less-than-expected 0.3 percent.

“The market has been pricing in a 90 percent chance of a rate hike next week,” said Stuart Ive, senior dealer at OMF. “That is called into question when you combine the milk price falling off a cliff, house price inflation starting to pull back and a market caught somewhat left-sided by weaker CPI data.”

He said the market is now pondering whether today’s events constitute enough data for the Reserve Bank to pause “as early as next week, or at least in September,” especially as it would help drive down a currency that governor Graeme Wheeler has called unsustainably high.

The kiwi traded at 64.14 euro cents from 64.64 cents late yesterday and fell to 50.76 British pence from 51.54 pence. It dropped to 88.49 yen from 89.45 yen and declined to 93.13 Australian cents from 93.73 cents yesterday.

(BusinessDesk)

© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

Wine: 20% Of Marlborough Storage Tanks Damaged By Quake

An estimated 20 percent of wine storage tanks in the Marlborough region, the country’s largest wine producing area, have been damaged by the impact of the recent Kaikoura earthquake. More>>

ALSO:

ACC: Levy Recommendations For 2017 – 2019 Period

• For car owners, a 13% reduction in the average Motor Vehicle levy • For businesses, a 10% reduction in the average Work levy, and changes to workplace safety incentive products • For employees, due to an increase in claims volumes and costs, a 3% increase in the Earners’ levy. More>>

Women's Affairs: Government Accepts Recommendations On Pay Equity

The Government will update the Equal Pay Act and amend the Employment Relations Act to implement recommendations of the Joint Working Group on Pay Equity. More>>

ALSO:

Immigration: Increase In Seasonal Workers For RSE

The current cap will be increased by 1,000 from 9,500 to 10,500 RSE workers for the 2016-17 season. Mr Woodhouse says the horticulture and viticulture industry is New Zealand’s fourth largest export industry, producing almost $5 billion in exports. More>>

ALSO:

Hurunui: Crown Irrigation Invests Up To $3.4m In North Canterbury

Crown Irrigation Investments will invest up to $3.4m in the Hurunui Water Project, an irrigation scheme that will be capable of irrigating up to 21,000 hectares on the south side of the Hurunui River in North Canterbury. More>>

ALSO:

Not So Great:Butterfly Eradication Success

The invasive pest great white butterfly has been eradicated from New Zealand in a world-first achievement, Primary Industries Minister Nathan Guy and Conservation Minister Maggie Barry say. More>>

Gordon Campbell: On The Government’s Tax Cuts Fixation

Long before the earthquake hit, the dodginess of the government tax cuts programnme was evident in the language of its packaging. It is being touted as a “tax cuts and family care” package... More>>

ALSO:

Get More From Scoop

 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news