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


NZ dollar heads for 3.3% weekly fall as central banks talk

NZ dollar heads for 3.3 percent weekly fall as central banks talk, emerging markets slide

By Paul McBeth

Aug. 23 (BusinessDesk) - The New Zealand dollar is heading for a 3.3 percent weekly fall after the Reserve Bank announced restrictions on low equity home loans, and central banks in Australia and the US kept investors dark on the trans-Tasman currencies.

The kiwi traded at 78.30 US cents at 5pm in Wellington from 78.29 cents at 8am and 78.38 cents yesterday, having started the week at 80.97 cents. The trade-weighted index was 73.99 at 5pm from 74.05 yesterday, and is heading for a 2.6 percent weekly decline from 75.96 at the Monday open.

New Zealand’s Reserve Bank governor Graeme Wheeler on Tuesday announced lenders will have to cut back on their level of home lending with small deposits, allowing him to keep interest rates lower for longer, and dimming the appeal of the local currency. The same day minutes to the Reserve Bank of Australia’s August policy meeting indicated a further rate cut was possible if needed, and minutes to the Federal Reserve’s latest rate review firmed up expectations the US central bank will start slowing its bond buying programme.

A BusinessDesk survey of 10 traders and strategists on Monday predicted the local currency would trade between 79.25 US cents and 82.25 cents this week, with seven picking a gain, two forecasting a decline and one saying it would remain unchanged.

“I don’t think anyone on Monday, when the kiwi was threatening the top-side, would have expected the currency near 78.50 US cents on Friday,” said Mike Jones, currency strategist at Bank of New Zealand. “The selling pressure has let up over the past couple of days.”

The Australasian currencies also came under pressure after global investors dumped assets in emerging markets, amid fears developing economies were slowing down. That prompted the Reserve Bank of India to embark on a bond-buying programme and a state-owned pension fund in Indonesia to accumulate beat up shares on the Jakarta stock exchange.

The central bankers’ symposium at Jackson Hole, Wyoming may attract some attention this weekend, despite the absence of Fed chairman Ben Bernanke, European Central Bank president Mario Draghi and Bank of England governor Mark Carney.

The New Zealand dollar fell to 86.78 Australian cents at 5pm in Wellington from 87.14 cents yesterday and gained to 77.54 yen from 77.02 yen. The kiwi decreased to 58.66 euro cents from 58.77 cents yesterday and almost unchanged at 50.23 British pence from 50.24 pence yesterday.


© Scoop Media

Business Headlines | Sci-Tech Headlines


Commerce Commission: Appeals Record $2.25m Fine In Vodafone FibreX Case

The Commerce Commission has filed an appeal in the High Court against a record $2.25 million fine imposed on Vodafone NZ Limited (Vodafone) for its offending under the Fair Trading Act during its FibreX advertising campaign. While the sentence imposed in the Auckland District Court on April 14 was the largest-ever fine under the Fair Trading Act, the Commission will argue that it is manifestly inadequate... More>>

All District Health Boards: Historic Pay Equity Settlement

An historic agreement has been ratified that addresses a long-standing undervaluation of a workforce that is critical to the smooth running of our hospitals and the delivery of healthcare... More>>

MPI: Dry Autumn In Waikato And South Auckland Leads To Drought Classification Drought conditions affecting the primary sector in the Waikato and South Auckland were today classified as a medium-scale adverse event, enabling a package of support for farmers and growers... More>>

Barfoot & Thompson: Rents Up By Around 3% In Most Areas

The average weekly rent paid for homes in most areas of Auckland has risen by around 3 percent year-on-year. The figures for end March from more than 16,000 properties... More>>

DoC: Smeagol The ‘Gravel Maggot’ Leaves Its Rare Mark On The Remote West Coast
An extremely rare species of sea slug or ‘gravel maggot’ has been detected for the first time on a remote beach in South Westland... More>>

Immigration: Annual Net Migration Loss Of 7,300

The provisional net loss of 7,300 people in the year ended March 2022 was the lowest net migration for a March year since 2012, Stats NZ said today... More>>