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


Risk off signifies Kiwi to potential slide lower

11.14 NZST, Wednesday 21 August 2013

Risk off signifies Kiwi to potential slide lower

By Andrew May (Sales Trader, CMC Markets New Zealand)

The New Zealand dollar has found itself bandaged and broken after tumbling as much as 200pts against the Greenback and Euro and 130pts against the Great British Pound since Monday’s open. Composing itself to open today at US 0.7960, up from a low 0.7953, the Kiwi dollar has had to fight its way above a tumultuous fall from grace across major crosses as a combination of local and international head winds buffeted the growth currency.

The early week emerging market sell off as precursor left international investors to cautiously remove risk as US treasury yields toy with 3% ahead of a highly anticipated tapering mandate this Thursday when the US Federal Reserve release its July FOMC minutes.

It wasn’t the only spur in the heel for the Kiwi. Aussie RBA minutes indicated additional rate cuts are still on the cards. Yesterday’s announcement by RBNZ Governor Graeme Wheeler about high loan to Value restrictions (LVR) coming in October, saw the Kiwi immediately trade lower.

Full well expecting the RBNZ ‘check-mate’ move to quell the insatiable housing demand (or lack of) wasn’t so much the bone of contention, rather the accompanying language that did the damage to local swap yields and the NZD. In particular, Governor Wheeler’s comments that LVR limits will be used in place of OCR hikes and as a means of preventing currency strength. As you could imagine, this caught investors immensely off guard.

However we must remember the NZD is heavily resilient and has proven itself time and time again in bleak or otherwise stagnant periods or growth. We remain fully supported at 0.7950, 0.7850 and heavily entrenched at 0.7685. With inflation currently within the 1-3% target band, continual strong commodity prices and intensely competitive interest in state owned energy company sales, don’t expect the local currency to drop its guard just yet.

© Scoop Media

Business Headlines | Sci-Tech Headlines


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>>


Grey Power: Is Disappointed To Learn Of More Bank Closures

Many older people are being left without essential services because of cost cutting and the march of modern technology. It is now expected that most banking transactions can occur via the internet or telephone. Jan Pentecost, President of the Grey Power ... 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>>

ComCom: How Real Is That Bargain?

The Commerce Commission urges retailers and consumers to think hard about the bargains being offered as ‘Black Friday’ and Christmas draw near. Black Friday has now overtaken Boxing Day in terms of retail spending, according to data from electronic ... 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>>