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

 


NZ dollar heads for 1.5% weekly slide

NZ dollar heads for 1.5% weekly slide as local and global factors coincide

By Paul McBeth

Jul. 18 (BusinessDesk) - The New Zealand dollar is heading for a 1.5 percent weekly drop against the greenback as a Malaysian passenger jet crash in rebel-held Ukraine and an Israeli ground invasion in Gaza sapped investors' risk appetite in an environment where the local currency had already fallen out of favour.

The kiwi fell to 86.78 US cents at 5pm in Wellington from 88.10 cents on Friday in New York last week. It traded at 86.75 cents at 8am and 86.93 cents yesterday. The trade-weighted index decreased to 80.84 from 80.96 yesterday, and is heading for a 1.3 percent weekly drop from 81.91 at last week's close.

A BusinessDesk survey of 10 traders and strategists on Monday predicted the kiwi would trade between 87 US cents and 89 cents this week, testing its post-float high. Four expected the currency to fall this week, three predicted it would gain, and three had a neutral bias.

The local currency started its decline early in the week after US Federal Reserve chair Janet Yellen gave a relatively upbeat assessment of the world's biggest economy during a question and answer session. A slump in dairy prices and slower-than-expected inflation prompted some traders to question whether the Reserve Bank will continue to hike interest rates as quickly as anticipated, eroding demand for the New Zealand dollar.

The kiwi took another hit when risk-sensitive assets were sold off as investors sought relatively safe places for their funds after Ukraine said the Malaysian plane was shot down by pro-Russian rebels, and as Israel launched a ground offensive in Gaza after failing to agree terms to a peace accord with Hamas.

"From the weaker GDT (GlobalDairyTrade) auction, the slightly below consensus CPI (consumers price index) print and throw in geopolitical risk with the Ukraine events and the Gaza Strip, all that conspires to risk-off sentiment for the market," said Mark Johnson, senior dealer at OMF. "The kiwi's been a casualty of that."

OMF's Johnson said the currency will probably takes its lead from overseas markets ahead of next Thursday's Reserve Bank OCR decision, which traders still expect will deliver a quarter-point increase in the official cash rate to 3.5 percent.

The kiwi fell to 64.14 euro cents from 64.25 cents yesterday and dropped to 87.93 yen from 88.20 yen. It traded at 50.73 British pence from 50.70 pence and decreased to 92.68 Australian cents from 92.78 cents.

(BusinessDesk)

© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

Hager Raid: Westpac Wrong To Release Bank Records To Police

The Privacy Commissioner has censured Westpac Banking Corp for releasing without a court order more than 10 months of bank records belonging to the political activist and journalist Nicky Hager during a police investigation into leaked information published in Hager's 2014 pre-election book, 'Dirty Politics'. More>>

ALSO:

EARLIER:

Crown Accounts: Government Ekes Out Six-Month Surplus Of $9M

The New Zealand government eked out a tiny surplus in the first six months of the fiscal year as growth in domestic consumption lifted the goods and services tax take, while uncertainties over the Kaikoura earthquake costs meant expenses were less than expected. More>>

ALSO:

Almost 400 Jobs: Shock At Cadbury's Dunedin Factory Closure

Workers at Cadbury in Dunedin are reeling after learning this morning that the iconic Cadbury factory is to close, with the loss of almost 400 jobs... “The company had reported it was doing well and this has come out of the blue,” says Chas. More>>

ALSO:

Transport: Boards Of Inquiry For Auckland Roading Projects

Boards of Inquiry have been appointed to decide on two significant Auckland roading projects in a move which will get a decision by the end of the year, Environment Minister Dr Nick Smith and Conservation Minister Maggie Barry announced today. More>>

ALSO:

Get More From Scoop

 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news