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


NZ dollar lower as USD gains on upbeat data

NZ dollar lower as USD gains on upbeat data; focus on trade, FOMC

By Rebecca Howard

June 12 (BusinessDesk) - The New Zealand dollar was slightly lower after improving US data buoyed the greenback and amid caution ahead of the Federal Reserve's next policy meeting and ongoing US-China trade tensions.

The kiwi was trading at 65.81 US cents at 7:50 am versus 65.94 US cents at 5pm in Wellington. The trade-weighted index eased to 72.19 points from 72.39.

The US dollar got a lift after business confidence data was better than expected and the producer prices index data was also firm.

"The kiwi continues to dribble lower as upbeat US data helps the USD strengthen," said ANZ FX/Rates strategist Sandeep Parekh.

The National Federation of Independent Business index of US small business confidence rose to 105.0 for May, its highest level in eight months and up from 103.5 in April.

US producer prices excluding food, energy and trade services rose 0.4 percent last month, matching April’s gain, the government said. The so-called core PPI increased 2.3 percent in the 12 months through May after rising 2.2 percent in April. The producer price index for final demand edged up 0.1 percent after gaining 0.2 percent in April, in line with expectations.

ANZ's Parekh said markets are now focused on what the Federal Reserve will make of the mixed global and domestic environment.

"The fact that both business and consumer confidence remain elevated is consistent with the Fed’s vigilant, wait and see approach on rates, but ongoing trade tensions have also weighed on US data and global sentiment recently."

The Fed is due to publish its rate decision early June 20 New Zealand time.

Stuart Ive, private client manager at OMF, said markets are also looking ahead to the G20 meeting at the end of June, in particular a possible meeting between US President Donald Trump and China's leader Xi Jinping.

"Will the trade deadlock be broken, followed by Trump trumpeting triumphantly or will the US impose an additional $300 billion in tariffs? Clearly the global markets are very concerned by this and in the lead up to the hopeful meeting between the two presidents markets are being cautious," he said. The resulting defensive positioning "usually pressures the kiwi lower."

Westpac market strategist Imre Speizer said markets will also be keeping a close eye on Australian jobs data - due Thursday - as it will have implications for the Reserve Bank of Australia. Economists polled by Bloomberg are expecting an unemployment rate of 5.1 percent and employment growth of 16,000 positions.

The kiwi was trading at 94.57 Australian cents from 94.74, at 51.72 British pence from 51.98, at 58.10 euro cents from 58.27, at 71.41 yen from 71.60 yen and at 4.5479 Chinese yuan from 4.5607.



© Scoop Media

Business Headlines | Sci-Tech Headlines


Workers “Blind-Sided”: Sanford Processing Restructure Plan

Up to 30 jobs – almost half Sanford’s Bluff workforce - could be lost if the proposal to move white-fish processing to Timaru goes ahead. More>>

up arrow"Steady": GDP Up 0.6 Percent In March Quarter

“Construction was the main contributor to GDP growth this quarter, rising 3.7 percent, on top of a 2.2 percent increase in the previous quarter,” national accounts senior manager Gary Dunnet said. More>>


Gordon Campbell: On Our Wild West Banking Culture

David Hisco’s nine year stint as CEO of the ANZ bank (while his expense claim eccentricities went by unbothered by board oversight) has been a weird echo of the nine years of social neglect by the previous National government... More>>


Privacy & Regulation Issues: Hopes Facebook Currency Will Speed Pacific Transfers

A Tongan community leader is hopeful Facebook's planned digital currency will help end long wait times for money being transferred between New Zealand and the Pacific Islands. More>>

Oil Exploration: Chevron, Equinor Depart NZ

Chevron and Norwegian oil giant Equinor have opted to abandon their joint exploration efforts off the east coast of the North Island... Chevron said the decision not to proceed with the next five-year stage of their work programmes was based on the firms’ broader portfolio considerations and not “policy or regulatory concerns.” More>>