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

 

NZ dollar falls on weaker commodity prices, falling stocks

NZ dollar falls as weaker commodity prices weigh on growth-linked currencies

By Paul McBeth

Sept. 29 (BusinessDesk) - The New Zealand dollar extended its decline in local trading as weaker commodity prices weighed on currencies linked to the production and export of raw materials.

The kiwi fell to 63.06 US cents at 5pm in Wellington from 63.32 cents at 8.30am, and down from 63.99 cents yesterday. The trade-weighted index declined to 68.97 from 69.79 yesterday.

Stocks across Asia followed Wall Street lower on persistent fears over China's economic growth, and while traders continue to second-guess when the Federal Reserve will start raising interest rates. The heightened volatility weighed on commodity prices, with the Thompson Reuters Core Commodity CRB Index, a measure of 19 commodity prices, falling 1.5 percent yesterday, and demand for currencies such as the kiwi and Australian dollars, whose economies rely on the exports such as iron ore, coal, dairy products and meat.

"The direction came from overnight with mixed data out of the US, also the Chinese data was negative," said Grant Bodle, senior FX dealer at HiFX in Auckland. "Gold and oil are down, and when commodity prices are lower, the kiwi and Aussie suffer."

HiFX's Bodle said commodity prices have been "whippy" in recent weeks, and today's decline will probably be short-lived. The kiwi dollar has traded between 62 US cents and 64 cents since mid-August in a consistent downtrend, and Bodle said it's probably ready for a brief correction above 64 cents.

The Reserve Bank continued to be a net buyer of New Zealand dollars in August, purchasing a net $81 million in the month, according to data released today. The bank bought a net $191 million in July. The central bank yesterday announced it would pay the government a $530 million dividend after a weaker kiwi dollar generated gains from its holdings of foreign currencies.

New Zealand's two-year swap rate fell three basis points to 2.69 percent at 5pm in Wellington, and the 10-year swap dropped eight basis points to 3.48 percent.

The local currency declined to 90.64 Australian cents from 91 cents yesterday, and fell to 4.0129 Chinese yuan from 4.0769 yuan. It dropped to 75.43 yen from 77.02 yen yesterday, and fell to 56.01 euro cents from 57.18 cents. The kiwi decreased to 41.58 British pence from 42.09 pence yesterday.

(BusinessDesk)

© Scoop Media

 
 
 
Business Headlines | Sci-Tech Headlines

 

Energy Resources Aotearoa: New Law On Decommissioning Could Be Costly Overkill
A new law on decommissioning oil and gas fields passed by Parliament today has good intentions but is overkill, according to Energy Resources Aotearoa. "We strongly support operators taking responsibility and paying the costs for decommissioning, which is what all good operators do," says chief executive John Carnegie... More>>


Commerce Commission: News Publishers’ Association Seeks Authorisation To Engage In Collective Bargaining

News Publishers’ Association of New Zealand Incorporated seeks authorisation and provisional authorisation to engage in collective bargaining with Facebook and Google. The Commerce Commission has received applications from News Publishers’ Association of New Zealand Incorporated (NPA) seeking authorisation and provisional authorisation on behalf of itself... More>>


Reserve Bank: MPC Continues To Reduce Monetary Stimulus
The Monetary Policy Committee agreed to raise the Official Cash Rate (OCR) to 0.75 per cent. The Committee agreed it remains appropriate to continue reducing monetary stimulus so as to maintain price stability and support maximum sustainable employment... More>>

PriceSpy: Producer Prices Increase
New Black Friday and Covid-19 Report* released by PriceSpy says people’s fear of stepping inside physical shops during big sales events like Black Friday has risen since last year; Kiwis are still planning to shop, but more than ever will do it online this year... More>>

NZ Skeptics Society: Announce Their 2021 Awards, And Dr Simon Thornley Wins The Bent Spoon

Every year the New Zealand Skeptics presents its awards to people and organisations who have impressed us or dismayed us, and this year it’s been hard to pick our winners because there have been so many choices!.. More>>



REINZ: Sales Volumes Leveling Out

Data released today by the Real Estate Institute of New Zealand (REINZ) shows there were 44 fewer lifestyle property sales (-2.6%) for the three months ended October 2021 than for the three months ended September 2021... More>>


BNZ: Auckland Retail Card Spending Bounces Back In Step Two
Bank of New Zealand (BNZ) card spending data released today shows one week of retail therapy at Alert Level 3 Step 2 has been enough to raise card spending in Auckland to levels greater than before the Delta lockdown... More>>