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

 


NZ Dollar Outlook: Kiwi may decline on US optimism

NZ Dollar Outlook: Kiwi may decline as optimism builds about US recovery after Jackson Hole

By Tina Morrison

Aug. 25 (BusinessDesk) - The New Zealand dollar may decline this week as growing optimism about a recovery in the US economy strengthens the greenback.

The kiwi will probably trade between 82.20 US cents and 84.70 cents this week, according to a BusinessDesk survey of 11 traders and strategists. Nine expect the kiwi to decline this week, while two expect it to remain relatively unchanged. None expect it to gain. The local currency recently traded at 83.49 US cents.

The New Zealand dollar has fallen to its lowest in six months, taking it to levels not seen since the Reserve Bank began hiking interest rates in March. The greenback has started the week on a stronger footing after Federal Reserve chair Janet Yellen was less dovish than expected about the outlook for the world's largest economy in her weekend speech to an annual gathering of the world's central bank governors at Jackson Hole, Wyoming.

While Yellen reiterated her view that there is still significant slack in the US labour market, she also said increases in the Federal funds rate target may come sooner than the Federal Reserve Open Market Committee currently expects and could then proceed at a more rapid pace. The US dollar strength since the gathering suggests officials may have been even more upbeat in informal discussions following the speech, traders said.

""People think (the US economy) is stronger than the Federal Reserve is saying," said Tim Kelleher, head of institutional foreign exchange sales in New Zealand at ASB Bank. "I think they need to go sooner rather than later" in raising interest rates.

In New Zealand this week, traders will be eyeing tomorrow's trade statistics for July where falling dairy prices may weigh on exports. Monthly data on low equity housing loans is also due tomorrow. On Wednesday, food price data for July is released while on Thursday the Reserve Bank publishes details of its foreign exchange transactions for July. On Friday, ANZ business confidence survey is due, as well as building consent data for July.

Australia has a report on second quarter construction activity on Wednesday, and capital expenditure and investment intentions on Thursday.

Elsewhere, UK banks are closed for a holiday today.

After last week’s better-than-expected economic reports on the US housing market, investors hope for more good news in coming days. Data scheduled for release including new home sales, due today, the FHFA house price index and S&P Case-Shiller home price index, due Tuesday, and the pending home sales index, due Thursday.

There is a flurry of other US economic reports scheduled for release, including the Chicago Fed national activity index, PMI services flash, and Dallas Fed manufacturing survey, due today; durable goods orders, consumer confidence, and Richmond Fed manufacturing index, due Tuesday; gross domestic product, weekly jobless claims, and Kansas City Fed manufacturing index, due Thursday, and Chicago PMI and consumer sentiment, due Friday.

In Europe, eyes will be on the Ifo Institute’s monthly survey of economic sentiment among business leaders in Germany, due today, and especially the latest reports on euro-zone inflation as well as unemployment, due Friday. Japan also releases its latest inflation data for July on Friday.

(BusinessDesk)

© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

Scoop Business: Alex Swney Pleads Guilty To $2.5M Fraud Charge

Alex Swney, former chief executive of the Auckland city centre business association Heart of the City, has pleaded guilty to dishonestly using documents to obtain $2.5 million. More>>

ALSO:

Petrol Burns Prices: Second Consecutive Quarterly Fall For CPI

The consumers price index (CPI) fell 0.3 percent in the March 2015 quarter, following a 0.2 percent fall in the December 2014 quarter, Statistics New Zealand said today. The last time the CPI showed two consecutive quarterly falls was in the December 1998 and March 1999 quarters. More>>

ALSO:

Scoop Business: NZ Broadcasters Launch Battle Against Global Mode ISPs

New Zealand broadcasters have confirmed they’ve launched legal proceedings against internet service providers who give customers’ access to “global mode”, which allows customers access to offshore online content, claiming it breaches the local content providers’ copyright. More>>

ALSO:

Sanford: Closure Of Christchurch Mussel Processing Plant Confirmed

The decision comes after a period of consultation with the 232 staff employed at the Riccarton site, who were told on 9 April that Sanford was considering the future of mussel processing in Christchurch. Recent weather patterns had impacted on natural spat (offspring) supply... More>>

ALSO:

Price Of Cheese: Dairy Product Prices Fall To The Lowest This Year

Dairy product prices fell in the latest GlobalDairyTrade auction, hitting the lowest level in the 2015 auctions so far, as prices for milk powder and butter slid amid concern about the outlook for commodities. More>>

ALSO:

Houston, We Have An Air Route: Air New Zealand To Fly Direct To The Heart Of Texas

Air New Zealand will fly its completely refitted Boeing 777-200 aircraft between Auckland and Houston up to five times a week opening up the state of Texas as well as popular nearby tourist states such as Louisiana and Florida. More>>

ALSO:

Scoop Business: Reserve Bank’s Spencer Calls On Govt To Rethink Housing Tax

The Reserve Bank has urged the government to take another look at a capital gains tax on investment in housing, allow increased high-density development and cut red tape for planning consents to address an over-heated Auckland property market. More>>

ALSO:

Get More From Scoop

 
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news