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

 

ICT Innovation: Six NZ Finalists In World Summit Awards

The awards are a global showcase of 40 projects, across eight categories, with a special emphasis on those which show the benefits of information and communication technology for the development of communities. New Zealand has finalists in six of the eight categories. More>>

ALSO:

Final Frontier: Rocket Lab And NASA Sign Commercial Space Launch Agreement

Rocket Lab has signed a Commercial Space Launch Act Agreement with the National Aeronautics and Space Administration (NASA). The agreement enables Rocket Lab to use NASA resources - including personnel, facilities and equipment - for launch and reentry efforts. More>>

ALSO:

Scoop Business: Wheeler Downplays Scope For ‘Large’ Rates Fall

Reserve Bank governor Graeme Wheeler says some market commentators are predicting further declines in interest rates that would only make sense for an economy in recession, although some easing is likely to be needed to maintain New Zealand’s economic growth. More>>

ALSO:

Ruataniwha Dam: Consent Conditions Could Mean Reduced Intensity

Legal advice sought by the Hawke’s Bay Regional Council on the Ruataniwha Dam consent conditions has confirmed that farmers who sign up to take water from the dam could be required to reduce the intensity of their farming operation to meet the catchment’s strict nitrogen limit. More>>

Health And Safety: Bill Now Sees Rules Relaxed For Small Businesses

Health and safety law reform sparked by the Pike River coalmine disaster has been reported back from the industrial relations select committee with weakened requirements on small businesses to appoint health and safety representatives and committees. More>>

ALSO:

Bearing Fruit: Annual Fruit Exports Hit $2 Billion For First Time

The value of fruit exported rose 20 percent (up $330 million) for the June 2015 year when compared with the year ended June 2014. Both higher prices and a greater quantity of exports (up 9.0 percent) contributed to the overall rise. More>>

ALSO:

Get More From Scoop

 
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news