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


NZ dollar little changed

NZ dollar little changed; RBA's Lowe says he's prepared to cut rates

By Jenny Ruth

July 25 (BusinessDesk) - The New Zealand dollar was little changed after receiving a boost in the middle of the day after Reserve Bank of Australia governor Philip Lowe said he’s prepared to ease monetary policy further if needed.

The kiwi was trading at 66.95 US cents at 5pm in Wellington from 67.07 cents at 8am, which was also the day’s high. The trade-weighted index eased to 73.39 points from 73.50.

“If demand growth is not sufficient, the board is prepared to provide additional support by easing monetary policy further,” Lowe said in a speech to a charitable foundation lunch.

“Whether or not further monetary easing is needed, it is reasonable to expect an extended period of low interest rates,” he said.

Peter Cavanaugh, the senior client advisor at Bancorp Treasury Services, says Lowe's comments had pushed the Australian dollar lower and lifted the New Zealand dollar.

“The market read it as positioning for more easing,” Cavanaugh says. “It’s a central banker saying it might go down but it’s not going up for a while.”

Lowe’s speech followed yesterday’s call by Westpac chief economist in Sydney, Bill Evans, that the RBA will cut rates twice more, once in September or October and then again in early 2020.

The RBA’s cash rate is already at a record low 1 percent. If Evans is right, it will be down to 0.5 percent by early next year.

“He’s got a lot of credibility on that subject,” having made correct calls in the past, Cavanaugh says.

But the RBA is just one among many central banks expected to cut interest rates. The market has fully priced in a 25 basis-point cut by the Federal Reserve next week and economists are forecasting our central bank will cut its official cash rate in August. The rate is at a record low 1.5 percent following a cut in May.

The New Zealand dollar was trading at 96.05 Australian cents from 96.12, at 53.68 British pence from 53.72, at 60.12 euro cents from 60.22, at 72.40 yen from 72.57 and at 4.6038 Chinese yuan from 4.6089.

The New Zealand two-year swap rate eased to 1.2613 percent from 1.2927 yesterday, while the 10-year swap rate fell to 1.6900 percent from 1.7275.


© Scoop Media

Business Headlines | Sci-Tech Headlines


Up 0.5% In June Quarter: Services Lead GDP Growth

“Service industries, which represent about two-thirds of the economy, were the main contributor to GDP growth in the quarter, rising 0.7 percent off the back of a subdued result in the March 2019 quarter.” More>>


Pickers: Letter To Immigration Minister From Early Harvesting Growers

A group of horticultural growers are frustrated by many months of inaction by the Minister who has failed to announce additional immigrant workers from overseas will be allowed into New Zealand to assist with harvesting early stage crops such as asparagus and strawberries. More>>


Non-Giant Fossil Disoveries: Scientists Discover One Of World’s Oldest Bird Species

At 62 million-years-old, the newly-discovered Protodontopteryx ruthae, is one of the oldest named bird species in the world. It lived in New Zealand soon after the dinosaurs died out. More>>

Rural Employers Keen, Migrants Iffy: Employment Visa Changes Announced

“We are committed to ensuring that businesses are able to get the workers they need to fill critical skills shortages, while encouraging employers and regions to work together on long term workforce planning including supporting New Zealanders with the training they need to fill the gaps,” says Iain Lees-Galloway. More>>


Marsden Pipeline Rupture: Report Calls For Supply Improvements, Backs Digger Blame

The report makes several recommendations on how the sector can better prevent, prepare for, respond to, and recover from an incident. In particular, we consider it essential that government and industry work together to put in place and regularly practise sector-wide response plans, to improve the response to any future incident… More>>