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

 

Trees: Surge Funding For Kauri Dieback And Myrtle Rust Research

“The $13.75 million investment announced today will mean that scientists can begin critically important research into kauri dieback and myrtle rust. It is vital that we get this work underway now to ensure that we combat these two pathogens and protect these taonga species." More>>

ALSO:

In Time For The Cup: Spark Sets 5G Date, Without Any Spectrum

Spark chief executive Simon Moutter has a big hairy audacious goal, to get the company's 5G mobile network up and running by July 2020 ... More>>

ALSO:

Mesh Mess: Commerce Commission To Appeal Steel & Tube Sentence

The Commission has today filed an appeal against the sentence imposed on Steel and Tube Holdings Limited (Steel & Tube) for false and misleading representations about steel mesh products. More>>

"Bipartisan Inaction": Rapid Rent Increases

The median nationwide rent has gone up $20 a week over the past two month, a rapid increase that is part of an upward trend overseen by both Labour and National Governments... More>>

ALSO: