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

 

New Zealand dollar holds gains; eyes on RBNZ

By Rebecca Howard

June 26 (BusinessDesk) - The New Zealand dollar held its gains as weak US data put pressure on the greenback and as investors await the Reserve Bank's rate decision this afternoon.

The kiwi was trading at 66.44 US cents at 7:50am in Wellington versus 66.47 US cents at 5pm. The trade-weighted index was at 72.55 from 72.53.

US consumer confidence fell to near a two-year low in June following a downward revision of May data by the Conference Board. A sub-index measuring the current situation fell to its lowest level in 12 months, while the forward-looking index was at its lowest level since January. New home sales fell 7.8 percent in May following a 3.7 percent fall in April, the Commerce Department reported.

A speech by Federal Reserve Chairman Jerome Powell added to the view the Fed may move to cut rates soon. Powell said there is a backdrop of heightened uncertainties and "the question my colleagues and I are grappling with is whether these uncertainties will continue to weigh on the outlook and thus call for additional policy accommodation."

He also asserted the Federal Reserve's independence in his speech to the Council on Foreign Relations in New York.

"The Fed is insulated from short-term political pressures—what is often referred to as our 'independence.' Congress chose to insulate the Fed this way because it had seen the damage that often arises when policy bends to short-term political interests. Central banks in major democracies around the world have similar independence," he said.



The main event for the kiwi today, however, is the Reserve Bank's policy decision at 2pm.

All 20 economists surveyed by Bloomberg expect the official cash rate to stay on hold at 1.50 percent. But the short statement will be closely scrutinised for any clues on whether the bank is planning to ease further.

"Whilst no change to policy is expected, the RBNZ’s statement will drive the NZD," said ANZ FX/rates strategist Sandeep NeverthessParekh.

Nevertheless, the market is pricing around a 20 percent chance of a cut today.

"Although GDP and CPI are close to the bank's targets, we cannot rule out the possibility of the bank delivering a surprise cut at this meeting to show it is ahead of the curve," said Prashant Newnaha, senior Asia-Pacific rates strategist for TD Securities.

The kiwi was trading at 95.43 Australian cents from 95.50. It was at 52.31 British pence from 52.12, at 58.42 euro cents from 58.26, at 71.17 yen from 71, and at 4.5691 Chinese yuan from 4.5741.

(BusinessDesk)

ends

© Scoop Media

 
 
 
Business Headlines | Sci-Tech Headlines

 

Royal Society Report: Understanding Our Plastics Problem

The report Plastics in the Environment: Te Ao Hurihuri – The Changing World sets out how plastics are made, used and disposed of. It outlines how plastics enter and accumulate in the environment, and the risks posed to wildlife and humans. More>>

ALSO:

Survey: NZ's Appetite For Eating Insects

When it comes to eating insects, New Zealanders like them crunchy and if given a choice would opt to eat a black field cricket before other creepy-crawlies, according to a new AgResearch report that explores the nation’s appetite for insects. More>>

ALSO:

Sweden Crash: CAA Grounds 21 Aircraft Over Safety Concerns

The Director of Civil Aviation Graeme Harris, has today, Saturday 20 July, 2019 suspended the airworthiness certificates of all 21 Gippsland GA8 Airvan aircraft currently operating in New Zealand. More>>

ALSO:

Emission Statement: No New Coal Boilers For Fonterra

Fonterra is shaving eleven years off its coal target, as it announces a new commitment to reduce its reliance on coal. More>>

ALSO: