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

 

NZ dollar drops on weaker business sentiment

NZ dollar drops on weaker business sentiment


By Jonathan Underhill

July 31 (BusinessDesk) - The New Zealand dollar fell after a survey showed deteriorating business confidence, and may decline further with key event risks next week in the GlobalDairyTrade auction, labour market statistics and a Fonterra Cooperative Group board meeting.

The kiwi dollar fell to 65.88 US cents as at 5pm in Wellington, from 66.39 cents late yesterday.The trade-weighted index fell to 70.31 from 70.74.

Business confidence fell to a six-year low this month, according to the ANZ Business Outlook, with construction firms and manufacturers becoming more gloomy and agricultural businesses remaining the most pessimistic. The survey adds to expectations the central bank will cut interest rates again this year in the face of weak dairy prices and deteriorating external position and after governor Graeme Wheeler said the bank remains in easing mode. With data showing an accelerating US economy, the greenback has been broadly stronger.

"Next week is a big week domestically with the dairy auction, employment data and Fonterra meeting - on all three the market is braced for negative news," said Robert Rennie, chief currency strategist at Westpac Banking Corp. "Traders have started to look into next week's event risk and that's seen the New Zealand dollar under-perform."

The dollar index, which measures the greenback against a basket of currencies, has climbed about 8 percent this year on optimism there's enough evidence of growth in the US economy, particularly the labour market, to allow the fed to raise its benchmark rate from near zero as soon as September. US government figures overnight showed domestic product increased at a 2.3 percent annualised rate in the second quarter, up from a revised 0.6 percent pace of growth in the first quarter.

The local currency traded at 90.20 Australian cents from 90.66 cents yesterday and dropped to 60.319 euro cents from 60.46 cents. It fell to 42.18 British pence from 42.54 pence and declined to 81.65 yen from 82.36 yen. It was at 4.0904 yuan from 4.1194 yuan.

Two-year swaps held at 2.88 percent and five-year swaps at 3.16 percent.

(BusinessDesk)

© Scoop Media

 
 
 
Business Headlines | Sci-Tech Headlines

 

Voluntary Administration: Renaissance Brewing Up For Sale

Renaissance Brewing, the first local company to raise capital through equity crowdfunding, is up for sale after cash flow woes and product management issues led to the appointment of voluntary administrators. More>>

Elsewhere:

Approval: Northern Corridor Decision Released

The approval gives the green light to construction of the last link of Auckland’s Western Ring Route, providing an alternative route from South Auckland to the North Shore. More>>

ALSO:

Media Mega Merger: Full Steam Ahead For Appeal

New Zealand's two largest news publishers have confirmed they are committed to pursuing their appeal against the Commerce Commission's rejection of the proposal to merge their operations. More>>

Crown Accounts: $4.1 Billion Surplus

The New Zealand Government has achieved its third fiscal surplus in a row with the Crown accounts for the year ended 30 June 2017 showing an OBEGAL surplus of $4.1 billion, $2.2 billion stronger than last year, Finance Minister Steven Joyce says. More>>

ALSO:

Mycoplasma Bovis: One New Property Tests Positive

The newly identified property... was already under a Restricted Place notice under the Biosecurity Act. More>>

Accounting Scandal: Suspension Of Fuji Xerox From All-Of-Government Contract

General Manager of New Zealand Government Procurement John Ivil says, “FXNZ has been formally suspended from the Print Technology and Associated Services (PTAS) contract and terminated from the Office Supplies contract.” More>>