Scoop has an Ethical Paywall
License needed for work use Register

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


NZ dollar slips on Jackson Hole jitters

NZ dollar falls on Jackson Hole jitters

By Jason Krupp

Aug. 26 (BusinessDesk) - The New Zealand dollar fell against the greenback, as jittery investors trimmed their exposure to higher yielding, or riskier assets, ahead of the central bankers' summit at Jackson Hole.

The New Zealand dollar recently traded at 82.73 U.S. cents, down from 82.88 cents yesterday, and rose to 71.24 on the trade-weighted index of major trading partners' currencies from 71.14 previously.

All eyes will be locked on the Wyoming mountain report in the U.S., where Federal Reserve Chairman Ben Bernanke is due to address central bankers at their annual symposium at 2am New Zealand time, amid expectations he will outline a range of fiscal policies to jolt the U.S. economy out of its downward spiral.

Speculation as to whether Bernanke will introduce a third round of quantitative easing in his speech has seen volatility spike in the lead up to the summit, with Wall Street's fear gauge, the Chicago Board Options Exchange’s Volatility Index, rising to 39.15 from 36.54.

Equities slipped, with the Standard & Poor's 500 Index falling 1.7% to 1,157.95, and Europe's Stoxx 600 Index closed 1.2% lower at 227.07, with growth-link currencies such as the kiwi and Australian following suit. So-called safe havens gained, with gold up to US$1,764.14 an ounce from US$1,736.60 an ounce yesterday, and yields on 10-year U.S. Treasury bills falling to 2.23% from 2.27%.

"Investors are feeling a bit nervous ahead of Jackson Hole, and are starting to come to realisation that there might now be much in it for them," said Imre Speizer, a market strategist at Westpac Banking Corp. "Risk currencies followed equities very closely, and there wasn't much more to the kiwi's movements than that."

Advertisement - scroll to continue reading

Are you getting our free newsletter?

Subscribe to Scoop’s 'The Catch Up' our free weekly newsletter sent to your inbox every Monday with stories from across our network.

On the crosses, the New Zealand dollar recently traded at 79.39 Australian cents, up from 79.23 cents yesterday, and rose to 64.22 Japanese yen from 63.82 yen previously. It gained to 57.61 euro cents from 57.33 cents yesterday, and rose to 50.86 pence from 50.61 pence previously.

Speizer said the kiwi may trade between a range of 82.15 U.S. and 83.10 cents, with the bias towards the downside ahead of tonight's meeting.


© Scoop Media

Advertisement - scroll to continue reading
Business Headlines | Sci-Tech Headlines

FMA: MAS To Pay $2.1M Penalty For Making False Representations

Following proceedings brought by the FMA, MAS has been ordered to pay a $2.1M penalty for making false and/or misleading representations to some customers. MAS admitted failing to correctly apply multi-policy discounts and no claims bonus discounts to some customers, failing to correctly apply inflation adjustments on some customer policies, and miscalculating benefit payments. More

IAG: Call On New Government To Prioritise Flood Resilience

The economic toll of our summer of storms continues to mount, with insurance payouts now topping $1B, second only to the Christchurch earthquakes. AMI, State, & NZI have released the latest Wild Weather Tracker, which reveals 51,000 claims for the North Island floods & Cyclone Gabrielle, of which 99% (motor), 97% (contents), and 93% (home) of claims have now been settled. More


Join Our Free Newsletter

Subscribe to Scoop’s 'The Catch Up' our free weekly newsletter sent to your inbox every Monday with stories from across our network.