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

 


NZ dollar slides to eight-week low on strong US GDP

NZ dollar slides to eight-week low as US dollar jumps on better second-quarter growth

By Tina Morrison

July 31 (BusinessDesk) - The New Zealand dollar slumped to an eight-week low as the US dollar jumped on better than expected US second quarter growth data, bolstering sentiment about the outlook for rising US interest rates.

The kiwi touched 84.61 US cents and was trading at 84.83 cents at 8am in Wellington, from 85.10 cents at 5pm yesterday. The trade-weighted index was little changed at 79.50 from 79.53 yesterday. after touching a seven-week low of 79.37 overnight.

The US dollar index, which measures the greenback against a basket of currencies, reached its highest level in more than 10 months after a report showed the world's largest economy expanded at a 4 percent annual rate in the second quarter, beating the 3 percent expectation of economists in a Reuters poll and after shrinking 2.1 percent in the first quarter.

Separately, the Federal Reserve Open Market Committee continued to pull back its monthly bond buying programme, keeping it on track to end the stimulus measure in October. The FOMC appeared less concerned about weak inflation and removed a phrase noting the jobless rate was elevated, signalling there may be a change in monetary policy "sooner rather than later", said Tim Kelleher, ASB Bank head of institutional foreign exchange sales in New Zealand. Higher interest rates in the US will increase demand for the greenback and help the Reserve Bank which wants to see a lower kiwi.

The New Zealand dollar has declined 3.3 percent so far this month on weaker-than-expected inflation and commodity prices and following Reserve Bank hints it may intervene to pull down the kiwi after signalling a pause in its hiking cycle. Data released by the Reserve Bank yesterday showed it sold just $2 million in the month of June.

"The Reserve Bank will be quite happy that the US dollar is stronger across the board," Kelleher said. "The kiwi is probably relatively fair value at the moment but we can move with further US dollar strength, back towards the bottom end of the ranges again."

The kiwi is unlikely to break through its 200-day moving average of 84.50 US cents today, and will likely trade between 84.50 cents and 85 cents, Kelleher said.

Traders will be looking ahead to tomorrow's non-farm payrolls data in the US tomorrow for further direction.

The New Zealand dollar advanced to 90.93 Australian cents from 90.66 cents yesterday ahead of a report today expected to show a decline in Australian monthly building approvals.

The kiwi slipped to 63.33 euro cents from 63.45 cents yesterday, weakened to 50.16 British pence from 50.22 pence, and advanced to 87.24 yen from 86.87 yen.

(BusinessDesk)

© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

Media: Fairfax Moves To Create Modern Newsroom

Fairfax Media New Zealand continues its newsroom transformation this week, with a proposal to further organise its editorial operations into focused, local teams and specialist national topic areas. More>>

ALSO:

Dairy: Fonterra Forecast For 2015/16 Season

Fonterra Co-operative Group Limited has today reduced its forecast Farmgate Milk Price for the 2014/15 season to $4.40 per kgMS. Along with its previously announced forecast dividend range of 20-30 cents per share, the change amounts to a forecast ... More>>

ALSO:

BusinessDesk: SkyCity Lifts Minimum Convention Centre Investment To $430M

SkyCity Entertainment Group, the casino operator, has lifted the minimum it will invest in the Auckland International Convention Centre to $430 million and said total costs including land may be $450 million to $470 million. More>>

Statistics: Drop In Dairy Prices Leads Fall In Exports

Total goods exports fell $240 million (5.5 percent) to $4.2 billion in April 2015 compared with April 2014, Statistics New Zealand said today. More>>

BusinessDesk: APN's NZME Sees Future In Paywalls, Growth In Digital Sales

APN News & Media has touted a single newsroom concept for its NZME unit in New Zealand, similar to what Germany's Die Welt uses, saying an 'integrated sales proposition' is helping it win market share, including ... More>>

Labour Party: Global Milk Prices Now Lowest In 6 Years

The latest fall in the global dairy price has brought it to the lowest level in six years and shows there must be meaningful action in tomorrow’s Budget to diversify the economy, says Labour’s Finance spokesperson Grant Robertson. “Dairy prices ... More>>


BusinessDesk: NZ Inflation Expectations Creep Higher In June Survey

May 19 (BusinessDesk) - New Zealand businesses lifted their expectations for inflation over the next two years, sapping any immediate pressure on the Reserve Bank to cut interest rates, and prompting the kiwi dollar to jump higher. More>>

BusinessDesk: Lower Fuel Costs Drive Down NZ Producer Input, Output Prices

May 19 - Producer input and output prices fell in the first quarter, mainly reflecting lower fuel costs and weakness in prices of meat and dairy products. More>>

Media: Fairfax Media NZ Announces Senior Editorial Team

Fairfax Media New Zealand has today confirmed its new editorial leadership team, as part of a transformation of its newsrooms aimed at enhancing local and national journalism across digital and print. More>>

Science: Flavonoids Reduce Cold And Cough Risk

Flavonoids reduce cold and cough risk Research from the University of Auckland shows eating flavonoids – found in green tea, apples, blueberries, cocoa, red wine and onions – can significantly reduce the risk of catching colds and coughs. The research, ... More>>

BusinessDesk: RBNZ House Alert Speech The Catalyst For Government Action

Prime Minister John Key all but conceded that pressure from the Reserve Bank of New Zealand for concerted action on rampant Auckland house prices was one of the main catalysts for the government's weekend announcements about tightly ... More>>

BusinessDesk: How To Fall Foul Of The New Housing Tax Rules: Tips From IRD

Just because you rented out your investment property doesn't absolve you from paying tax, says the Inland Revenue Department in a summary of commonly made mistakes by non-professional property investors when it comes to their tax liability.More>>

Legal: Superdiversity Law, Policy And Business Stocktake Announced

Mai Chen, Managing Partner at Chen Palmer New Zealand Public and Employment Law Specialists and Adjunct Professor of Law at the University of Auckland, today announced the establishment ... More>>

Get More From Scoop

 
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news