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

 


NZ dollar heads for 0.8% weekly decline

NZ dollar heads for 0.8% weekly decline as Fonterra cuts payout, US GDP beats expectations

By Tina Morrison

Aug. 1 (BusinessDesk) - The New Zealand dollar is headed for a 0.8 percent weekly decline as more buoyant US data bolstered demand for the greenback and kiwi sentiment was dented by Fonterra Cooperative Group cutting its forecast payout and speculation that the central bank will make good on hints it will intervene in the currency market.

The kiwi slid to 84.95 US cents at 5pm in Wellington, from 85.60 cents at 8am on Monday and at levels above 88 cents last month. The trade-weighted index weakened to 79.71 from 79.90 on Monday.

While weaker commodity prices and intervention talk weighed on the kiwi locally, better data out of the US increased demand for the greenback. A report this week showed the US 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.

"There was a combination of good US data in the form of GDP and really bad domestic news. The New Zealand-US exchange rate is lower for those two reasons," said Peter Cavanaugh, senior adviser at Bancorp Treasury Services. "It ended last week on a negative note and it has simply been downhill traffic all the way."

Still, Cavanaugh said the kiwi is ending the week on a less negative note because of how far it has fallen in a short space of time. "So far it's been no more than a correction but it is straining the uptrend," he said.

While the Reserve Bank signalled a pause in its tightening cycle after raising the benchmark interest rate last week, rates are still expected to move higher in the future and the kiwi has retained buyer support around its 200-day moving average of 84.50 US cents.

Tonight, the focus is on US non-farm payrolls data, with economists in a Reuters poll expecting the world's largest economy added 233,000 jobs in July.

Given sentiment, currencies are more likely to react if the jobs number falls short, said Bancorp's Cavanaugh.

The New Zealand dollar advanced to 91.42 Australian cents from 91.24 cents at 5pm yesterday, was little changed at 63.46 euro cents from 63.48 cents, advanced to 50.34 British pence from 50.24 pence and gained to 87.44 yen from 87.37 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