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

 

NZ dollar falls as expectations for rate hikes ease

NZ dollar falls as greenback advances, expectations for local rate hikes pushed out

By Tina Morrison

Aug. 27 (BusinessDesk) - The New Zealand dollar weakened overnight, weighed down by a rising US dollar and changing expectations for Reserve Bank interest rate rises.

The kiwi slipped to 83.24 US cents at 8am in Wellington, from 83.41 cents at 5pm yesterday. The trade-weighed index fell to 78.63 from 78.74 yesterday.

The US dollar index, which measures the greenback against a basket of currencies, hit its highest level in 13 months as better than expected US consumer confidence and manufacturing reports reinforced speculation that the Federal Reserve may bring forward plans to raise interest rates. Meanwhile in New Zealand, traders are pushing out expectations for interest rate hikes as weaker commodity prices dent growth. Traders are now pricing in an 84 percent chance of a Reserve Bank hike in March, and just a 19 percent chance in December, according to Overnight Index Swap data.

"The interest rate market is taking off interest rate hikes that have been priced into the market over the next 12 months and that's just taken the steam out of the kiwi," said Martin Rudings, senior dealer, foreign exchange at OMF. "A lot of people have been buying kiwi in anticipation of interest rate hikes and I think now that they are pricing them differently, the currency people are selling out of the kiwi dollar.

"The path going forward looks like further downside for the kiwi," Rudings said. "The kiwi certainly looks like the ugly currency, along with the euro. The backdrop is a stronger US dollar. The market is starting to come around to the fact that we are likely to see a stronger US dollar. That's not only because of the perception that interest rates in the US will rise earlier than the Fed has predicted, but also by default because there's not many currencies out there that look very good at the moment."

In New Zealand today, food price data for July is published at 10:45am.

The New Zealand dollar touched an eight-month low of 89.30 Australian cents overnight and was trading at 89.44 cents at 8am, from 89.75 cents yesterday. Australian second quarter construction and consumer confidence reports are due out today.

The kiwi was little changed at 63.19 euro cents from 63.16 cents yesterday, at 50.30 British pence from 50.27 pence, and 86.61 yen from 86.63 yen.

(BusinessDesk)

© Scoop Media

 
 
 
Business Headlines | Sci-Tech Headlines

 

Auckland Transport: Successful Bridge Repair Opens Two Additional Lanes To Traffic

The opening of two additional lanes on the Auckland Harbour Bridge this morning will help relieve some motorway congestion for motorists heading home to the North Shore tonight. More>>

ALSO:

Statistics New Zealand: COVID-19 Sees Record 12.2 Percent Fall In New Zealand’s Economy

Gross domestic product (GDP) fell by 12.2 percent in the June 2020 quarter, the largest quarterly fall recorded since the current series began in 1987, as the COVID-19 restrictions in place through the quarter impacted economic activity, Stats NZ said ... More>>

ALSO:

Climate: Scientists Release ‘Blueprint’ To Save Critical Ecosystems And Stabilize The Earth’s Climate

A group of scientists and experts produced the first comprehensive global-scale analysis of terrestrial areas essential for biodiversity and climate resilience, totaling 50.4% of the Earth's land. The report was published in Science Advances ... More>>

ALSO:

MPI: Independent Review Launched Into Assurances For Safe Transport Of Livestock By Sea

The Ministry for Primary Industries (MPI) has launched an independent review of the assurances it receives for the safe transport of livestock by sea. MPI Director-General Ray Smith says Mike Heron QC has been appointed to lead the review, which is expected ... More>>

ALSO:


Computers: New Zealand PC Market Grows Nearly 40% Due To Work From Home Demand

COVID-19 had large impacts on demand for PCs as businesses prepared for lockdowns by purchasing notebooks to mobilise their workforce. In the second quarter of 2020, New Zealand's Traditional PC market experienced a 39.7% year-on-year (YoY) growth ... More>>

ALSO:


University Of Auckland: Whale-Watching By Satellite – Follow Their Travels Online

Scientists have successfully attached satellite tracking tags to six New Zealand southern right whales, or tohorā, and are inviting the public to follow the whales’ travels online. Part of a major research project involving the University of Auckland ... More>>

Commerce Commission: Kiwibank Admits System Failures And Agrees To Pay Customers $5.2 Million

Kiwibank has entered into a settlement agreement with the Commerce Commission after reporting that it failed to have in place robust home loan variation disclosure policies, procedures and systems. In a settlement dated 27 August 2020, Kiwibank admitted that ... More>>

Ministry of Health: Public Transport Distancing Requirements Relaxed

Physical distancing requirements on public transport have been reviewed by the Ministry of Health to determine whether they are still required at Alert Level 2 (or below). The Ministry’s assessment is that mandatory face covering and individuals tracking ... More>>

ALSO:

NZHIA: New Zealand Hemp Industry Set To Generate $2 Billion Per Annum And Create 20,000 Jobs

A new report says a fully enabled hemp industry could generate $2 billion in income for New Zealand by 2030, while also creating thousands of new jobs. Written by industry strategist Dr Nick Marsh, the report has prompted calls from the New Zealand Hemp ... More>>

ALSO:

Stats NZ: One In 14 Employed People Report High Risk Of Losing Jobs

About one in 14 workers say they expect to lose their job or business by mid-2021, Stats NZ said today. A survey of employed people in the June 2020 quarter showed 7 percent felt there was a high or almost certain chance of losing their job or business ... More>>

ASB Quarterly Economic Forecast: NZ Economy Doing Better Than Expected, But Challenges Remain

August lockdown estimated to have shaved 8% off NZ’s weekly GDP, and 0.5% off annual GDP Economy now expected to shrink 5% (year-on-year) by end of 2020 Unemployment rate now expected to peak at 7.2% The latest ASB Quarterly Economic Forecast is less ... More>>

ALSO: