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

 

NZ dollar in biggest fall against greenback since November

Thursday 19 January 2017 05:12 PM

NZ dollar in biggest fall against greenback since November

By Edwin Mitson

Jan. 19 (BusinessDesk) - The New Zealand dollar saw its biggest one-day fall since November as the greenback strengthened sharply after a speech by the chair of the US Federal Reserve Janet Yellen, in which she said the world's largest economy was getting to the stage at which it could operate without the emergency support introduced since the global financial crisis in 2008.

The local currency fell to 71.38 US cents at 5 pm in Wellington, from 71.64 cents at 8 am and 72.04 cents late yesterday. A peak to trough loss of 1.3 percent today was the biggest fall in percentage terms since Nov. 9, Reuters reported. The trade-weighted index fell to 78.31 from 78.72.

The Federal Reserve slashed interest rates to near zero and introduced a policy of quantitative easing in response to the GFC, but has slowly been looking to wean the economy off the stimulus it introduced. In December last year, the Fed raised rates for the second time since the crisis, to a range of 0.5 to 0.75 percent.

Sheldon Slabbert, a sales trader at CMC Markets in Auckland, said the Federal Reserve was remaining quite hawkish in its attitude to interest rates.

"Janet Yellen talked this morning, we're still looking at probably two to three interest hikes, but I’m a little unconvinced at this point, four were promised last year, we only got one,” he said.

He added that markets were currently volatile, albeit within an established range of between 68 and 74 US cents.

"The market is also now realising we are heading into an uncertain time now," he said. "The US dollar was somewhat oversold in the short-term, we’re seeing a rebalancing on the kiwi."

The kiwi had soared against the US dollar on Tuesday as traders in America sold down the greenback on comments from President Trump that the world's reserve currency had got "too strong." Those gains were almost all unwound on Wednesday.

On a day in which the local currency was down against all the major currencies, it rose to 81.78 yen from 81.42 yen this time yesterday and dropped to 94.92 Australian cents, from 95.36 cents.

The kiwi continued to drop against the British pound, falling to 58.13 pence from 58.33 pence late yesterday. Against the euro, it fell to 67.11 euro cents from 67.32 cents.

It was down against the Chinese Yuan, dropping to 4.8940 yuan from 4.9391 Yuan.

New Zealand's two-year swap rate rose 3 basis points to 2.38 percent, while 10-year swaps rose 7 basis points to 3.41 percent.

(BusinessDesk)

ends

© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

Auckland Port To Recapture Gas: Union Calls On Ports To Stop Spewing Methyl Bromide

The Maritime Union of New Zealand welcomes the decision by Ports of Auckland to stop releasing methyl bromide emissions into the air. The move to fully recapture the toxic gas after fumigation sets a new benchmark for industry best practice. More>>

ALSO:

Retail: Banks Shoes Calls In Receiver

Banks Group, which runs 14 stores across the country under the brands including Banks Shoes and Shoe Connection, has been tipped into receivership at the request of director John Bank. More>>

ALSO:

NZ's Space Programme: Rocket Lab Makes It To Space (But Not Orbit)

Electron lifted-off at 16:20 NZST from Rocket Lab Launch Complex 1 on the Mahia Peninsula in New Zealand. It was the first orbital-class rocket launched from from a private launch site in the world. More>>

ALSO:

Earlier:

Budget: Irrigate (Good Times, Come On!)

Additional grant funding of $26.7 million over the next three years plus a capital boost of $63 million towards irrigation investments in Budget 2017 will deliver economic and environmental benefits through better use of water... More>>

ALSO:

Silver Fern Farms: Proposal To Close Fairton Sheepmeat Plant

Silver Fern Farms has advised its people of the proposal to permanently close the site, and has discussed potential transfer options to its other sites in the region as part of the consultation process...
More>>

ALSO: