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

 

Watch This Space: Mahia Rocket Lab Launch Site Officially Opened

Economic Development Minster Steven Joyce today opened New Zealand’s first orbital launch site, Rocket Lab Launch Complex 1, on the Mahia Peninsula on the North Island’s east coast. More>>

Earlier:

Marketing Rocks!
Ig Nobel Award Winners Assess The Personality Of Rocks

A Massey University marketing lecturer has received the 2016 Ig Nobel Prize for economics for a research project that asked university students to describe the “brand personalities” of three rocks. More>>

ALSO:

Nurofen Promotion: Reckitt Benckiser To Plead Guilty To Misleading Ads

Reckitt Benckiser (New Zealand) intends to plead guilty to charges of misleading consumers over the way it promoted a range of Nurofen products, the Commerce Commission says. More>>

ALSO:

Half A Billion Accounts, Including Xtra: Yahoo Confirms Huge Data Breach

The account information may have included names, email addresses, telephone numbers, dates of birth, hashed passwords (the vast majority with bcrypt) and, in some cases, encrypted or unencrypted security questions and answers. More>>

ALSO:

Rural Branches: Westpac To Close 19 Branches, ANZ Looks At 7

Westpac confirms it will close nineteen branches across the country; ANZ closes its Ngaruawahia branch and is consulting on plans to close six more branches; The bank workers union says many of its members are nervous about their futures and asking ... More>>

Interest Rates: RBNZ's Wheeler Keeps OCR At 2%

Reserve Bank governor Graeme Wheeler kept the official cash rate at 2 percent and said more easing will be needed to get inflation back within the target band. More>>

ALSO:

Get More From Scoop

 
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news