Top Scoops

Book Reviews | Gordon Campbell | Scoop News | Wellington Scoop | Community Scoop | Search


NZ dollar may fall as U.S. stocks drop

NZ dollar may fall as U.S. stocks drop, China’s growth slows

By Paul McBeth

Dec. 10 – The New Zealand dollar may fall after U.S. stocks declined and Australian central bank Governor Glenn Stevens raised the prospect of a faltering Chinese economy, which would sap demand for raw materials.

U.S. stocks stopped a two-day advance as companies forecast disappointing earnings. FedEx Corp., the second-largest American packaging and shipping company, shed over 15% after forecasting a declining profit. Stevens told an audience of economists yesterday that the Chinese economy has “slowed much more quickly than anyone had forecast.” In New Zealand, government figures this week may show retail sales growth stalled in October.

“If China slows, there will be further issues for 2009 and the New Zealand and Australian currencies will suffer,” said Alex Sinton, senior dealer at ANZ National Bank. The outlook for weaker retail sales at home may also weigh on the kiwi, he said.

The kiwi increased to 53.88 U.S. cents from 53.75 cents yesterday and dropped to 49.57 yen from 49.64 yen. It weakened against the Australian dollar, falling to 82.10 cents from 82.32 cents yesterday, and decreased to 41.75 euro cents from 41.80 cents.

Sinton said the dollar may trade between 53.50 U.S. cents and 54.95 cents today.

The Reserve Bank of Australia predicts Chinese industrial production declined over the last four months. Stevens said there is “every chance that the rate of growth of China’s GDP is currently noticeably below the 8% pace.”

In a further sign of the global slump, Japan’s economy contracted in the third quarter faster than forecast, and the Bank of Canada acknowledged its economy had entered a recession.

New Zealand’s third quarter trade figures out today will likely show an increase in export growth and a decline in imports, said Bank of New Zealand in a report. It predicts New Zealand’s terms of trade “took a hammering” and forecasts a 5% decline driven by weaker dairy and beef prices.

The weak local data combined with a grim global outlook is expected to put pressure on the kiwi, and the currency’s volatility may continue to attract sellers, said Danica Hampton, currency strategist at BNZ.



© Scoop Media

Top Scoops Headlines


Any Questions: Scoop Launches New Q&A Website

It’s an easy way to find out party positions and allows you to view candidates’ answers side by side. It’s also a way for you to make your voice heard this election, and get the parties talking about the things that are important to you. More>>


Rawiri Taonui: The Maori Election

The election battle for the Maori seats 2017 opened last year when Maori Party President Tuku Morgan announced a peace deal with the Mana Movement aimed at securing all the Maori seats and holding the balance of power. More>>

Scoop HiveMind Project: Universal Basic Income - Are We Up For It?

This is an opportunity for you as one of the 4 million potential funders and recipients of a Universal Basic Income to collectively consider the issue:
1. Is UBI is a desirable policy for New Zealand; and
2. How should a UBI system work in practice. More>>


Lyndon Hood: National Announces Plan To Hit Youth With Big Mallets

The National party has announced its youth justice policy, which includes a controversial plan for recidivist serious youth offenders to be hit over the head with a comically large rubber mallet. More>>


Lyndon Hood: This ->

It's been brought to my attention that Labour's new campaign slogan is "Let's do this". A collective call to action. A mission. I myself was halfway out of the couch before I realised I wasn't sure what it was I was supposed to do. More>>


Scoop Hivemind Report: What New Zealanders Think About Affordable Housing

Ordinary citizens have had very few venues where they can debate and discuss as to what they believe has led to the crisis in affordable housing and how we might begin to address this. The HiveMind on affordable housing was about redressing the balance. More>>