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

 

NZ dollar holds its gains; focus shifts to Fed

NZ dollar holds its gains; focus shifts to Fed after RBNZ keeps rates on hold

By Rebecca Howard

Nov. 8 (BusinessDesk) - The New Zealand dollar held its gains against the greenback after the central bank kept rates on hold but pared back its language around a possible rate cut.

The kiwi traded at 67.87 US cents at 5 pm in Wellington from 67.90 cents at 8:30 am and 66.39 cents late yesterday. The trade-weighted index was at 73.87 from 73.67.

Reserve Bank governor Adrian Orr kept the official cash rate at 1.75 percent as widely expected. He said the central bank still expects to keep it at this level into 2020, despite emerging signs of inflation and an improving economic picture. The statement dropped a reference to the next move being up or down although in a subsequent press conference he said that a rate cut was still possible.

"I think it would be pointless to do that, to remove an option. What we are saying is we are very data dependent, data-driven around how our projections unfold. The risks to the downside remain," he said.

The kiwi had already jumped on strong domestic jobs data Wednesday. It was further shored up after Republicans strengthened their control over the US Senate while Democrats took the House, as had been expected.

Sheldon Slabbert, a sales trader at CMC Markets, said he was slightly surprised the local currency didn't fall given that it would appear that Orr is in no hurry to lift rates.

"It's quite interesting that the kiwi didn't really react."

He noted the kiwi faces strong resistance around 68.20 to 68.45 US cents. "There's quite a bit of congestion there. There is a bit of a pause as the market digests things," he said.

Slabbert said the focus will now be on the US Federal Reserve, which is due to publish its statement early Friday New Zealand time. The Fed is widely expected to retain its hawkish stance. It has signalled a rate hike in December.

The kiwi traded at 93.14 Australian cents from 93 cents yesterday.

The New Zealand dollar traded at 51.66 British pence from 51.43 pence Wednesday, and at 59.34 euro cents from 58.98 cents. It was at 4.7007 Chinese yuan from 4.5885 yuan and at 77.11 yen from 76.44 yen.

New Zealand's two-year swap rate rose 3 basis points to 2.15 percent; the 10-year swaps rose 7 basis points to 3.08 percent.

(BusinessDesk)

© Scoop Media

 
 
 
Business Headlines | Sci-Tech Headlines

 

New Reports: Flood Risk From Rain And Sea Under Climate Change

One report looks at what would happen when rivers are flooded by heavy rain and storms, while the other examines flooding exposure in coastal and harbour areas and how that might change with sea-level rise. More>>

ALSO:

Super Fund/Canada Bid v NZTA: Tow Preferred Bidders For Auckland Light Rail

The two preferred delivery partners for Auckland light rail have been chosen and a final decision on who will build this transformational infrastructure will be made early next year, Minister of Transport Phil Twyford announced. More>>

ALSO:

9.3 Percent: Gender Pay Gap Unchanged Since 2017

“While it has remained flat since 2017, the gender pay gap has been trending down since the series began in 1998, when it was 16.2 percent,” labour market statistics manager Scott Ussher said. More>>

ALSO:

Ex-KPEX: Stuff Pulls Pin On Media Companies' Joint Ad-Buying Business

A four-way automated advertising collaboration between the country's largest media companies is being wound up after one of the four - Australian-owned Stuff - pulled the pin on its involvement as part of a strategic review of its operations ... More>>