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

 


NZ dollar falls as expectations for rate hikes ease

NZ dollar falls as greenback advances, expectations for local rate hikes pushed out

By Tina Morrison

Aug. 27 (BusinessDesk) - The New Zealand dollar weakened overnight, weighed down by a rising US dollar and changing expectations for Reserve Bank interest rate rises.

The kiwi slipped to 83.24 US cents at 8am in Wellington, from 83.41 cents at 5pm yesterday. The trade-weighed index fell to 78.63 from 78.74 yesterday.

The US dollar index, which measures the greenback against a basket of currencies, hit its highest level in 13 months as better than expected US consumer confidence and manufacturing reports reinforced speculation that the Federal Reserve may bring forward plans to raise interest rates. Meanwhile in New Zealand, traders are pushing out expectations for interest rate hikes as weaker commodity prices dent growth. Traders are now pricing in an 84 percent chance of a Reserve Bank hike in March, and just a 19 percent chance in December, according to Overnight Index Swap data.

"The interest rate market is taking off interest rate hikes that have been priced into the market over the next 12 months and that's just taken the steam out of the kiwi," said Martin Rudings, senior dealer, foreign exchange at OMF. "A lot of people have been buying kiwi in anticipation of interest rate hikes and I think now that they are pricing them differently, the currency people are selling out of the kiwi dollar.

"The path going forward looks like further downside for the kiwi," Rudings said. "The kiwi certainly looks like the ugly currency, along with the euro. The backdrop is a stronger US dollar. The market is starting to come around to the fact that we are likely to see a stronger US dollar. That's not only because of the perception that interest rates in the US will rise earlier than the Fed has predicted, but also by default because there's not many currencies out there that look very good at the moment."

In New Zealand today, food price data for July is published at 10:45am.

The New Zealand dollar touched an eight-month low of 89.30 Australian cents overnight and was trading at 89.44 cents at 8am, from 89.75 cents yesterday. Australian second quarter construction and consumer confidence reports are due out today.

The kiwi was little changed at 63.19 euro cents from 63.16 cents yesterday, at 50.30 British pence from 50.27 pence, and 86.61 yen from 86.63 yen.

(BusinessDesk)

© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

Media: Julian Wilcox Leaves Māori TV

Māori Television has confirmed the resignation of Head of News and Production Julian Wilcox. Mr Maxwell acknowledged Mr Wilcox’s significant contribution to Māori Television since joining the organisation in 2004. More>>

ALSO:

Genetics: New Heat Tolerant Cow Developed

Hamilton, New Zealand-based Dairy Solutionz Ltd has led an expert genetics team to develop a new dairy cow breed conditioned to thrive in lower elevation tropical climates and achieve high milk production under heat stress. More>>

Fractals: Thousands More Business Cards Needed To Build Giant Sponge

New Zealand is taking part in a global event this weekend to build a Menger Sponge using 15 million business cards but local organisers say they are thousands of business cards short. More>>

Scoop Business: NZ Net Migration Rises To Annual Record In September

New Zealand’s annual net migration rose to a record in September, beating government forecasts, as the inflow was spurred by student arrivals from India and Kiwis returning home from Australia. More>>

ALSO:

Scoop Business: Fletcher To Close Its Christchurch Insulation Plant, Cut 29 Jobs

Fletcher Building, New Zealand’s largest listed company, will close its Christchurch insulation factory, as it consolidates its Tasman Insulations operations in a “highly competitive market”. More>>

ALSO:

Scoop Business: Novartis Adds Nine New Treatments Under Pharmac Deal

Novartis New Zealand, the local unit of the global pharmaceuticals firm, has added nine new treatments in a far-ranging agreement with government drug buying agency, Pharmac. More>>

ALSO:

Crown Accounts: English Wary On Tax Take, Could Threaten Surplus

Finance Minister Bill English is warning the tax take may come in below forecast in the current financial year, as figures released today confirm it was short by nearly $1 billion in the year to June 30 and English warned of the potential impact of slumping receipts from agricultural exports. More>>

ALSO:

Get More From Scoop

 
 
Standards New Zealand

Standards New Zealand

Mosh Social Media
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news