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


NZ dollar falls as US retail sales seen supporting end to QE

NZ dollar weakens as US retail sales report seen supporting tapering in September

By Tina Morrison

Aug. 14 (BusinessDesk) – The New Zealand dollar weakened as investors bet retail sales growth in the US suggests a revival in the world’s largest economy which will prompt the Federal Reserve to start tapering its monetary stimulus next month.

The kiwi slipped to 79.64 US cents at 8am in Wellington, from 79.97 cents at the 5pm market close yesterday. The trade-weighted index dipped to 75.15 from 75.21 yesterday.

The US dollar index, which measures the greenback against a basket of other currencies, jumped after a report showed US retail sales rose in July for a fourth month. Investors are betting positive economic data will prompt the Fed at its next meeting in September to reduce its US$85 billion a month bond buying quantitative easing programme which has debased the US currency.

“There was broad US dollar strength,” said Martin Rudings, a senior advisor at OM Financial. “The market is now perceiving that the tapering of the US QE will start in September and the case is getting stronger as we go through more data,”

In New Zealand today, traders will be eyeing a report at 10:45am expected to show second quarter retail sales rose a buoyant 1.3 percent.

“I suspect the data in New Zealand will start getting better in the September quarter,” said OM Financial’s Rudings. “The New Zealand economy is still looking pretty robust.”

To be sure, Rudings said the stronger driver for the local currency is the tapering of monetary stimulus in the US.

“Essentially they are endorsing the fact that the US economy is recovering and no longer requires them to expand their balance sheet - it is the beginning of normalising everything that was skewed after the global financial crisis,” Rudings said. “Now we are unwinding all that. It took five years to put it on, we will probably get it off within a year.”

The kiwi could slide down below 70 US cents by the end of the year should tapering start in September, he said.

The New Zealand dollar weakened to 87.36 Australian cents at 8am in Wellington from 87.47 yesterday. The local currency dropped to 51.51 British pence from 51.68 yesterday and was little changed at 60 euro cents. The kiwi advanced to 78.10 yen from 77.78 yen yesterday.


© Scoop Media

Business Headlines | Sci-Tech Headlines


Stats NZ: Largest Drop In Terms Of Trade In A Decade As Dairy Export Prices Sour

Lower export prices for dairy, meat, and logs in the September 2020 quarter led to the biggest drop in terms of trade since June 2009, Stats NZ said today. Export prices fell in the September 2020 quarter, down 8.3 percent from its highest ever ... More>>


Stats NZ: Election Boosts October Job Numbers

Job numbers were boosted by general election staff in October 2020, along with rises in the manufacturing, retail, and hospitality industries, Stats NZ said today. Filled jobs rose by 27,667 to 2.2 million in October 2020 compared with September, after ... More>>

Government: New Year Border Exception For Seasonal Workers In The Horticulture And Wine Industries

2000 additional RSE workers to enter New Zealand early next year employers must pay these workers at least $22.10 an hour employers will cover costs of managed isolation for the RSE workers RSE workers will be paid the equivalent of 30 hours work a week ... More>>


Media: Discovery, Inc. Completes Acquisition Of New Zealand’s Mediaworks TV Ltd

Auckland, New Zealand, December 1, 2020 - Discovery, Inc. (“Discovery”), the global leader in real-life entertainment, has completed its acquisition of New Zealand’s leading independent free-to-air commercial broadcaster, MediaWorks TV Ltd, now operating ... More>>

Department Of Conservation: Big Year Underway At Albatross Colony

Familiar faces are returning for the new season of Royal Cam, with a big breeding year underway for the toroa/northern royal albatross colony on Otago’s windswept Pukekura/Taiaroa Head. More than 120 albatrosses, a taonga species, have returned ... More>>

Real Estate: ASB Survey Reveals Majority Of Kiwis Expect House Prices To Keep Climbing


House price expectations are soaring as New Zealand’s housing market shifts up a gear. But stretched affordability is putting a dent in perceptions of whether it’s a good time to buy. While Kiwis reveal they do expect interest rates to fall further. ... More>>

Stats NZ: Births And Deaths: Year Ended September 2020

Births and deaths releases provide statistics on the number of births and deaths registered in New Zealand, and selected fertility and mortality rates. Key facts For the year ended September 2020: 57,753 live births and 32,670 deaths ... More>>