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

 

Fossils: Ancient Penguins Lived Alongside Dinosaurs?

Penguins are much older than previously thought and their evolution probably dates back to the days of the dinosaurs, according to research on the fossilised leg bone and toes of a giant ancient penguin found in rocks near Waipara, North Canterbury. More>>

No Voda/Sky: Commission Declines Clearance For Merger

The Commerce Commission has declined to grant clearance for the proposed merger of Sky Network Television and Vodafone New Zealand. More>>

ALSO:

EARLIER:

Power: IEA Report On New Zealand's Energy System

Outside of its largely low-carbon power sector, managing the economy’s energy intensity and greenhouse gas emissions while still remaining competitive and growing remains a challenge. More>>

ALSO:

NASA: Seven Earth-Size Planets Around A Single Star

NASA's Spitzer Space Telescope has revealed the first known system of seven Earth-size planets around a single star. Three of these planets are firmly located in the habitable zone, the area around the parent star where a rocky planet is most likely to have liquid water. More>>

ALSO:

Auckland Transport Case: Men Guilty Of Corruption And Bribery Will Spend Time In Jail

Two men who were found guilty of corruption and bribery in a Serious Fraud Office (SFO) trial have been sentenced in the Auckland High Court today... The pair are guilty of corruption and bribery offences relating to more than $1 million of bribes which took place between 2005 and 2013 at Rodney District Council and Auckland Transport. More>>

ALSO:

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:

Get More From Scoop

 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news