Scoop has an Ethical Paywall
Work smarter with a Pro licence Learn More

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

 

NZ dollar gains vs. Australian dollar on iron ore weakness

NZ dollar gains vs. Australian dollar on iron ore weakness; Yellen awaited

By Jonathan Underhill

March 27 (BusinessDesk) - The New Zealand dollar gained against its Australian counterpart on sliding prices for iron ore exported to China, that nation's biggest market, while traders await a speech by US Federal Reserve chair Janet Yellen on Friday in the US.

The kiwi rose to 97.13 Australian cent as at 5pm in Wellington, from 96.98 cents yesterday. It was little changed at about 75.80 US cents.

Iron ore sank to a record low US$54.20 a tonne this week and has more than halved in the past 12 months amid a supply glut, according to Reuters, which reported today that capacity utilisation rates at small Chinese iron ore mines fell as low as 20 percent at the end of last year. Concern about weak iron ore prices weighed on the Australian dollar and also restrained the kiwi against the greenback, traders said.


The drop in iron ore "is weighing on the Aussie, given that it's a key export," said Michael Johnston, senior trader at HiFX. "It is symptomatic of a slowdown in China."


He said fair value for the kiwi against the Australian dollar "is a good chunk lower than where we are now" but the two currencies could still get to parity "given the Reserve Bank of Australia is cutting rates and the RBNZ is firmly on hold."


Traders are awaiting Yellen's speech tonight at the Federal Reserve Bank of San Francisco Conference on “The New Normal for Monetary Policy” for clues to the thinking of the central bank in the world's biggest economy.

Advertisement - scroll to continue reading

Are you getting our free newsletter?

Subscribe to Scoop’s 'The Catch Up' our free weekly newsletter sent to your inbox every Monday with stories from across our network.


"Her comments have been pouring a bit of cold water on imminent US rate hikes," Johnston said. Even so, "the US is still going to raise rates" and US dollar strength "is going to be the dominant trend in the medium term."


The trade-weighted index rose to 79.16 from 79.03 yesterday. The kiwi gained to 51.03 British pence from 50.92 pence yesterday, and rose to 69.67 euro cents from 69.04 cents. It was unchanged at 90.43 yen.


(BusinessDesk)

© Scoop Media

Advertisement - scroll to continue reading
 
 
 
Business Headlines | Sci-Tech Headlines

 
GenPro: General Practices Begin Issuing Clause 14 Notices

GenPro has been copied into a rising number of Clause 14 notices issued since the NZNO lodged its Primary Practice Pay Equity Claim against General Practice employers in December 2023.More

SPADA: Screen Industry Unites For Streaming Platform Regulation & Intellectual Property Protections

In an unprecedented international collaboration, representatives of screen producing organisations from around the world have released a joint statement.More

 
 
 
 
 
 
 
 
 
 
 
 

Join Our Free Newsletter

Subscribe to Scoop’s 'The Catch Up' our free weekly newsletter sent to your inbox every Monday with stories from across our network.