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


NZ dollar drops to six-month low as greenback soars

NZ dollar drops to six-month low as greenback soars on Fed expectations

By Paul McBeth

Sept. 9 (BusinessDesk) - The New Zealand dollar fell to the lowest in more than six months after the greenback soared on expectations the Federal Reserve will start hiking interest rates earlier and faster than previously anticipated.

The kiwi fell to 82.54 US cents at 5pm in Wellington from 82.77 cents at 8am and 83.16 cents yesterday. The trade-weighted index declined to 78.91 from 79.02 yesterday.

The Dollar Index, a measure of the greenback against a basket of currencies, rose as high as 84.50, the highest since July last year, as optimism about the strength of the world's biggest economy fuels expectations the Fed will move away from running a zero interest rate policy. The Federal Open Market Committee will review policy next week.

"The US dollar is stronger across the board - every market is pre-empting the Fed," said Tim Kelleher, head of institutional FX sales NZ at ASB Institutional in Auckland. "There's a cluster of support at around 81.80/82.40 (US cents) - that's the target."

Traders are also preparing for the Reserve Bank of New Zealand's monetary policy statement on Thursday, which may show a slower track for interest rate hikes as inflation comes in tamer than the central bank expected. The prospect of a longer pause in the tightening cycle has put the local currency under pressure.

ASB's Kelleher said the Reserve Bank would have to be "pretty dovish" to push the kiwi lower.

New Zealand government figures today showed core retail spending on credit and debit cards grew 0.6 percent in August, led by a pick-up in hospitality spending.

The kiwi rose to 89.17 Australian cents from 88.76 cents yesterday after business confidence sagged in August, according to the National Australia Bank survey. The local currency gained to 87.69 yen from 87.38 yen yesterday. It was little changed at 51.35 British pence at 5pm in Wellington from 51.30 pence and slipped to 64.09 euro cents from 64.26 cents.


© Scoop Media

Business Headlines | Sci-Tech Headlines


Stats: Auckland’s Population Falls For The First Time
In the wake of the COVID-19 pandemic, New Zealand’s population growth slowed down with Auckland recording a population decline for the first time ever, Stats NZ said today. “New Zealand saw slowing population growth in all regions... More>>

BusinessNZ: Third Snapshot Report Reveals $9.5 Billion Business Investment In Climate Action

Signatories to the Climate Leaders Coalition have committed to invest $9.5 billion over the next five years to reduce emissions from their businesses, as revealed in their third anniversary snapshot report released today... More>>

Digitl: The home printer market is broken
Printers are more of a security blanket that a serious aid to productivity. Yet for many people they are not optional.
Even if you don’t feel the urge to squirt ink onto dead trees in order to express yourself, others will insist on printed documents... More>>

Retail NZ: Some Good News In COVID Announcements, But Firm Dates Needed

Retail NZ is welcoming news that the Government is increasing financial support for businesses in light of the ongoing COVID-19 lockdown, and that retail will be able to open at all stages of the new “Covid Protection Framework... More>>

ComCom: Companies In Hot Water For Selling Unsafe Hot Water Bottles And Toys

A wholesaler and a retailer have been fined a total of $140,000 under the Fair Trading Act for selling hot water bottles and toys that did not comply with mandatory safety requirements. Paramount Merchandise Company Limited (Paramount) was fined $104,000 after pleading guilty in the Manukau District Court... More>>

Reserve Bank: Robust Balance Sheets Yield Faster Economic Recovery

Stronger balance sheets for households, businesses, financial institutions and the government going into the pandemic contributed towards maintaining a sound financial system and yielding a faster economic recovery than following previous deep recessions... More>>