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, little changed, may fall on technical basis

NZ dollar, little changed, may fall on technical basis as inflation report looms

By Jonathan Underhill

April 18 (BusinessDesk) - The New Zealand dollar was little changed and is more likely to fall, on a technical basis after failing to punch through its highs for the year. First-quarter inflation figures tomorrow are expected to be supportive of interest rates staying low.

The kiwi dollar traded at 73.37 US cents as at 5pm in Wellington from 73.38 cents late yesterday. The trade-weighted index was little changed at 75.17.

The kiwi climbed to as high as 73.95 cents on Friday before retreating and failing to break through its highs for the year, a double top of about 74.37 cents. The 200-day moving average is 71.80 cents and the currency is more likely to retreat toward the bottom of its recent trading range of 72 cents to 74 cents, said Grant Bodle, a senior dealer at HiFX.

"The down-trend channel is still intact," Bodle said. The kiwi "is more likely to trend back to 72 cents."

There is more scope for the kiwi to decline on a fundamental basis given the Federal Reserve is expected to hike US interest rates twice, and possibly three times more this year, he said. "On fundamentals, the US dollar should strengthen," he said, adding that he was surprised the kiwi didn't sell off on Monday morning following the missile strikes on Syria over the weekend. The lack of reaction was in contrast to another geopolitical risk, when North Korea was testing missiles near Japan and the kiwi fell.

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.

Economists expect annual inflation was 1.1 percent in the first quarter, slowing from a 1.6 percent pace three months earlier. That's also the forecast of the Reserve Bank, which is projecting its first rate increase in 2020. The kiwi didn't move much after dairy product prices rose at the Global Dairy Trade auction, gaining for the first time in five events, amid strong demand. The GDT price index increased 2.7 percent and whole milk powder rose 0.6 percent to US$3,311 a tonne.

The kiwi dollar rose to 4.6120 yuan from 4.6086 yuan yesterday when data showed China's economy grew 6.8 percent, year-on-year, in the first quarter, while industrial production grew 6 percent, missing estimates.

The local dollar rose to 51.28 British pence from 51.16 pence as figures showed the UK jobless rate was 4.2 percent in February, versus expectations for a rate of 4.3 percent. Average weekly earnings rose 2.8 percent, year-on-year, as expected.

The New Zealand dollar traded at 94.43 Australian cents from 94.48 cents yesterday. It traded at 59.24 euro cents from 59.26 cents and rose to 78.70 yen from 78.57 yen.

New Zealand's two-year swap rate fell 1 basis point to 2.30 percent and the 10-year swap rate fell 3 basis points to 3.15 percent.

(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.