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


NZ dollar headed for 1% weekly fall

NZ dollar headed for 1% weekly fall as commodity prices decline

By Rebecca Howard

Nov. 17 (BusinessDesk) - The New Zealand dollar was heading for a 1 percent weekly decline in the face of weaker commodity prices.

The kiwi dollar traded at 68.58 US cents as a 5pm in Wellington from 68.55 cents late yesterday and is down from 69.28 cents a week ago. The trade-weighted index was at 72.58 from 72.70.

The CRB Index of 19 commonly traded commodities has fallen more than 2 percent in the past week, while prices of dairy products have declined in the past three GlobalDairyTrade auctions. Traders are watching for developments on US tax reforms, with progress potentially seen helping the US dollar.

Tim Kelleher, head of institutional foreign exchange sales at ASB Bank, said on the day the greenback pared some of its recent losses as Asian investors digested news the US House of Representatives approved the package of tax cuts and shifted the tax debate to the Senate. Kelleher noted, however, the reaction was fairly muted. "I think that was just part of the journey... and until we actually see it physically done then no one knows what's going on," he said.

Kelleher said with little data on the immediate horizon the kiwi is likely to stick to a tight range but said there is key support at around 68.20 that would open up further downside if it were to break.

The kiwi traded at 90.32 Australian cents from 90.24 cents yesterday. It traded at 51.81 British pence from 52.04 pence and at 58.04 euro cents from 58.20 cents. It was at 4.5435 yuan from 4.5497 yuan and traded at 77.12 yen from 77.45 yen.

New Zealand's two-year swap rate fell 1 basis point to 2.15 percent while 10-year swaps fell 2 basis point to 3.12 percent.

BNZ senior markets strategist Jason Wong said the 2-year swaps stand a good chance of reaching a fresh low for the year, down towards 2.10 percent as "domestic liquidity is gushing."

According to Wong, a softer market for existing houses, loan-to-value restrictions, and uncertainty around the election have seen softer credit growth. "In the absence of credit growth picking up, banks will remain well-funded and will be looking for a home to park cash, keeping downward pressure on short-term rates," he said.


© Scoop Media

Business Headlines | Sci-Tech Headlines


Discussion Paper: Govt To Act On Unfair Commercial Practices

“I’ve heard about traders who have used aggressive tactics to sell products to vulnerable consumers, and businesses that were powerless to stop suppliers varying the terms of their contract, including price.” More>>


'Considering Options' On Tip Top Ownership: Fonterra Drops Forecast Milk Price

Fonterra Co-operative Group Limited today revised its 2018/19 forecast Farmgate Milk Price range from $6.25-$6.50 per kgMS to $6.00-$6.30 per kgMS and shared an update on its first quarter business performance. More>>


Science: Legendary Telescope Being Brought Back To Life

One of the world’s most famous Victorian telescopes will be restored and available for public viewing in Takapō after spending five decades in storage... The Brashear Telescope was used in the late 1800s by Percival Lowell for his studies of Mars. More>>

Employment Amendment Bill Passes: CTU Hails Victory For Working People

"This law allows Kiwis to access their basic rights at work, to make more informed choices about their employment, and help each other get a fairer deal." More>>