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

 

Tourism: China Southern Airlines To Fly To Christchurch

China Southern Airlines, in partnership with Christchurch Airport and the South Island tourism industry, has announced today it will begin flying directly between Guangzhou, Mainland China and the South Island. More>>

ALSO:

Dodgy: Truck Shops Come Under Scrutiny

Mobile traders, or truck shops, target poorer communities, particularly in Auckland, with non-compliant contracts, steep prices and often lower-quality goods than can be bought at ordinary shops, a Commerce Commission investigation has found. More>>

ALSO:

Auckland Transport: Government, Council Agree On Funding Approach

The government and Auckland Council have reached a detente over transport funding, establishing a one-year, collaborative timetable for decisions on funding for the city's transport infrastructure growth in the next 30 years after the government refused to fund the $2 billion of short and medium-term plans outlined in Auckland's draft Unitary Plan. More>>

ALSO:

Bullish On China Shock: Slumping Equities, Commodities May Continue, But Not A GFC

The biggest selloff in stock markets in at least four years, slumping commodity prices and a surge in Wall Street's fear gauge don't mean the world economy is heading for another global financial crisis, fund managers say. More>>

ALSO:

Real Estate: Investors Driving Up Auckland Housing Risk - RBNZ

The growing presence of investors in Auckland's property market is increasing the risks, and is likely to both amplify the housing cycle and worsen the potential damage from a downturn both to the financial system and the broader economy, said Reserve Bank deputy governor Grant Spencer. More>>

ALSO:

Annual Record: Overseas Visitors Hit 3 Million Milestone

Visitor arrivals to New Zealand surpassed 3 million for the first time in the July 2015 year, Statistics New Zealand said today. The record-breaking 3,002,982 visitors this year was 7 percent higher than the July 2014 year. More>>

ALSO:

Get More From Scoop

 
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news