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

 

Scoop Business: NZ Dollar Catches Breath After "Goldilocks" Slump

The New Zealand dollar edged up following its dramatic slump yesterday after the Reserve Bank confirmed speculation it intervened in the currency market last month and PM John Key suggested a “Goldilocks” level far lower than at present. More>>

ALSO:

Biosecurity: Kiwifruit Claim To Hold Officials Accountable For Psa

Kiwifruit growers have joined forces to hold Biosecurity NZ accountable in the courts for its negligence in allowing 2010’s Psa outbreak that devastated New Zealand’s kiwifruit industry and exports. Foundation claimants representing well ... More>>

ALSO:

Poison: Anglers Advised Not To Eat Trout In 1080 Areas

With the fishing season opening in just a few days (1 October 2014), anglers are being warned by the Department of Conservation(DOC) not to eat trout from pristine backcountry waters and their downstream catchments, where the department is conducting 1080 poisoning operations. More>>.

ALSO:

Quotas: MPI Swoop On Suspected Fraudulent Fishing Activity

Ministry for Primary Industries (MPI) compliance officers swooped on a Hawkes Bay fishing enterprise today to secure evidence in an investigation into suspected fraudulent activity... “The investigation involves activity throughout the commercial supply chain – catching, landing, processing and exporting.” More>>

ALSO:

Scoop Business: Fonterra Slashes 2015 Milk Payout, Earnings Tumble 76%

Fonterra Cooperative Group cut its forecast 2015 milk price payout by about 12 percent, citing weaker global dairy prices and said there is a risk of further declines given strong global milk production. More>>

ALSO:

Scoop Business: RBNZ Keeps OCR At 3.5%, Signals Slower Pace Of Future Hikes

Reserve Bank governor Graeme Wheeler kept the official cash rate at 3.5 percent and signalled he won’t be as aggressive with future rate hikes as previously thought as inflation remains tamer than expected. The kiwi dollar fell to a seven-month low. More>>

ALSO:

Weather: Dry Spells Take Hold In South Island

Many areas in the South Island are tracking towards record dry spells as relatively warm, dry weather that began in mid-August continues... for some South Island places, the current period of fine weather is quite rare. More>>

ALSO:

Get More From Scoop

 
 
Computer Power Plus

Standards New Zealand

Standards New Zealand

Mosh Social Media
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news