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

 

Housing Policy: Auckland Densification As Popular As Ebola, English Says

Finance Minister Bill English said calls by the Reserve Bank Governor for more densification in Auckland’s housing were “about as popular in parts of Auckland as Ebola” would be. More>>

ALSO:

Crown Accounts: NZ Government Deficit Smaller Than Expected In First Half

The New Zealand government's operating deficit was smaller than expected in the first six months of the financial year, as the consumption and corporate tax take rose ahead of forecast in December, having lagged estimates in previous months. More>>

ALSO:

Fruit & Veg Crackdown: Auckland Fruit Fly Find Under Investigation

The Ministry for Primary Industries (MPI) is investigating a find of a single male Queensland fruit fly in a surveillance trap in the Auckland suburb of Grey Lynn... MPI has placed legal controls on the movement of fruit and some vegetables outside of a defined circular area which extends 1.5km from where the fly was trapped in Grey Lynn. More>>

ALSO:

Scoop Business: Westpac NZ Reaches $2.97M Swaps Settlement

Westpac Banking Corp’s New Zealand unit has agreed to pay $2.97 million in a settlement with the Commerce Commission over the way the bank sold interest rate swaps to farmers between 2005 and 2012. More>>

ALSO:

Going Dutch: Fonterra Kicks Off $144M Partnership With Dutch Cheese Maker

Fonterra Co-operative Group, the world’s largest dairy exporter, has commissioned a new dairy ingredients plant in Heerenveen, in the north of the Netherlands, its first wholly-owned and operated ingredients plant in Europe. More>>

ALSO:

Scoop Business: NZ Retail Sales Beat Estimates

New Zealand retail sales rose more than expected in the fourth quarter, led by vehicle-related transactions, food and beverages, adding to evidence that cheap credit and a growing jobs market are encouraging consumers to spend. More>>

ALSO:

Delivery Cuts Go Ahead: 'Government Money Grab' From NZ Post

"It's a money grab by the Government as the shareholder of New Zealand Post" says Postal Workers Union advocate Graeme Clarke about the changes announced by NZ Post. More>>

ALSO:

Get More From Scoop

 
 
Standards New Zealand

Standards New Zealand
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news