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


Kiwi falters as global markets rally on easing in Ukraine

Kiwi falters as global markets rally on easing in The Ukraine tensions

By Garry Dean (Sales Trader, CMC Markets New Zealand)
19 August 2014

Risk assets have posted significant rallies in overnight trading as we start the week, with an easing of tensions seen in the Ukraine. Russia has said that a dispute over its humanitarian aid convoy has been settled, a major move forward given the conflict reported over the weekend. European and US equity markets have rallied strongly, with gold trading back below $1,300, and oil falling to its lowest level in more than a year. While the easing of geopolitical tensions overnight is encouraging, we have seen Russian tensions oscillate over the past few weeks, so traders shouldn’t become too complacent. The overnight performance of the Kiwi has been disappointing however, as it failed to hold above 0.8500, and opens Tuesday morning just above 0.8470. Support is seen initially at the 200-day moving average of 0.8466, with longer-term support at 0.8400. Major resistance is currently seen at 0.8530.

We see the release of NZ’s Q2 Producer Price numbers this morning, followed by RBNZ two-year inflation expectations later this afternoon. A decline in both PPI input and output prices is expected, with a potential decline in the two-year inflation rate forecast likely to reinforce the view of a pause in rate increases extending to Q1 next year. Tuesday night also sees the latest Global Dairy Trade auction result. With prices down 40% since February, the outcome of tonight’s auction should see further volatility in the Kiwi.

The release of minutes from the latest US FOMC meeting are due on Thursday morning, and likely to show a continued dovish stance despite recent dissenting comments from some members. While continuing to wind-back QE, the prospects of an earlier rate hike were reduced last week with the trend of weak US retail sales continuing into July, and weaker employment numbers seen also. This could see the US Dollar give back some of the gains posted last month, as these moves were built around an earlier start to the tightening cycle. Fed Chair Janet Yellen and ECB President Mario Draghi will both be speaking at the annual meeting of world central bankers in Jackson Hole at the end of the week, with discussion around the timing of QE from the ECB likely to dominate the headlines.


© Scoop Media

Business Headlines | Sci-Tech Headlines


DIY: Kiwi Ingenuity And Masking Tape Saves Chick

Kiwi ingenuity and masking tape has saved a Kiwi chick after its egg was badly damaged endangering the chick's life. The egg was delivered to Kiwi Encounter at Rainbow Springs in Rotorua 14 days ago by a DOC worker with a large hole in its shell and against all odds has just successfully hatched. More>>


Trade: Key To Lead Mission To India; ASEAN FTA Review Announced

Prime Minister John Key will lead a trade delegation to India next week, saying the pursuit of a free trade agreement with the protectionist giant is "the primary reason we're going" but playing down the likelihood of early progress. More>>



MYOB: Digital Signatures Go Live

From today, Inland Revenue will begin accepting “digital signatures”, saving businesses and their accountants a huge amount of administration time and further reducing the need for pen and paper in the workplace. More>>

Oil Searches: Norway's Statoil Quits Reinga Basin

Statoil, the Norwegian state-owned oil company, has given up oil and gas exploration in Northland's Reinga Basin, saying the probably of a find was 'too low'. More>>


Modern Living: Auckland Development Blowouts Reminiscent Of Run Up To GFC

The collapse of property developments in Auckland is "almost groundhog day" to the run-up of the global financial crisis in 2007/2008 as banks refuse to fund projects due to blowouts in construction and labour costs, says John Kensington, the author of KPMG's Financial Institutions Performance Survey. More>>


Health: New Zealand's First ‘No Sugary Drinks’ Logo Unveiled

New Zealand’s first “no sugary drinks logo” has been unveiled at an event in Wellington... It will empower communities around New Zealand to lift their health and wellbeing and send a clear message about the damage caused by too much sugar in our diets. More>>


Get More From Scoop

Search Scoop  
Powered by Vodafone
NZ independent news