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


NZ dollar mixed, buffeted by Fed talk and downunder data

NZ dollar mixed, buffeted by Fed talk and downunder data

By Jenny Ruth

Sept. 19 (BusinessDesk) - The New Zealand dollar was mixed after a roller-coaster day of US central bank action and domestic and Australian data.

The kiwi was trading weaker at 63.08 US cents at 5pm in Wellington from 63.22 cents at 7:50am. But the trade-weighted index was slightly stronger at 70.23 from 70.21, mainly because the kiwi rose to 92.94 Australian cents from 92.45 cents.

The US central bank cut the Fed Funds rate by 25 basis points, as expected, but the market reacted more to chair Jerome Powell's commentary and the fact that only seven out of 17 policymakers favour a further cut this year.

With the US dollar jumping in reaction, the kiwi fell from 63.45 US cents to as low as 62.98 cents but had recovered to 63.13 cents just before stronger-than-expected domestic GDP data for the June quarter was released.

The kiwi then shot as high as 63.31 cents before gradually running out of puff as markets digested the fact that the data still showed annual growth slowing to 2.1 percent, a six-year low.

The New Zealand dollar fell as low as 62.96 US cents, only to revive again after Australian employment data for August came out.

That showed the unemployment rate ticking up to 5.3 percent from 5.2 percent in July. While 34,700 jobs were created, well over twice as many as the 15,000 expected, that reflected growth in part-time jobs as full-time jobs fell 15,500.

"We've had the Fed and some pretty chunky data but the moves weren't that significant," says Mike Shirley, a dealer at Kiwibank.

Once the dust settled after the GDP data, "the market decided, yes, 2.1 percent is better than expected, but it's still not very good," Shirley says.

"Aussie employment data is always a mixed bag, but the over-arching theme today was negative."

The market is now looking ahead to what Bank of England governor Mark Carney has to say about that central bank's latest thoughts on monetary policy.

"The sage words of Mark Carney are going to get the fine toothcomb treatment," Shirley said, given all the economic uncertainties being exacerbated by Brexit ructions.

The New Zealand dollar was unchanged at 50.54 British pence, at 57.12 euro cents from 57.25, at 68.06 yen from 68.51 and at 4.4805 Chinese yuan from 4.4784.

The two-year swap rate eased to a bid price of 0.9586 percent from 0.9825 yesterday while 10-year swaps fell to 1.2525 percent from 1.3250.


© Scoop Media

Business Headlines | Sci-Tech Headlines


Marine And Freshwater Reports: EDS Calls For Urgent Action On Marine Management

“There are some big issues to address. These include many marine species and habitats that are in serious trouble. Of the sample investigated, the report finds that 22% of marine mammals, 90% of seabirds and 80% of shorebirds are threatened with or actually at risk of extinction..." More>>


$7.5 Billion Surplus: Government Accounts "Show Strong Economy"

“The surplus and low levels of debt show the economy is in good shape. This allows the Government to spend more on infrastructure and make record investments in health and education,” Grant Robertson says. More>>


New OIO Application Trumps Judicial Review: OceanaGold Cleared To Buy Land For Waihi Tailings Expansion

In a surprise turnaround, the government has given OceanaGold a greenlight to buy land to expand its Waihi mine after the application was previously turned down by Land Information Minister Eugenie Sage. More>>


Christchurch Rebuild: Fletcher Sued For $7.5m Over Justice Precinct

Fletcher Building is being sued for $7.5 million by utilities contractor Electrix, one of the subcontractors on the Christchurch Justice and Emergency Services Precinct. More>>

Three New Drugs: PHARMAC Signs Bundle Deal For More Cancer Medicines

420 New Zealanders with lung cancer, breast cancer, multiple sclerosis and respiratory disease will benefit each year from a bundle deal PHARMAC has finalised with a medicine supplier. More>>