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


NZ dollar gains as weaker US data reinforces rate track

NZ dollar gains as weaker US economic data reinforces gradual path of future Fed hikes

By Tina Morrison

Dec. 21 (BusinessDesk) - The New Zealand dollar advanced as weaker-than-expected US economic data reinforced views that future Federal Reserve interest rate hikes will be gradual.

The kiwi was at 67.24 US cents at 8am in Wellington, unchanged from the New York close, and ahead of 66.91 cents at 5pm on Friday. The trade-weighted index gained to 73.42 from 73.21 on Friday.

The US dollar index, which measures the greenback against a basket of currencies, slid after a report showed US services PMI, a survey of purchasing managers in the service industry, fell to 53.7 in December from 56.1 in November, missing expectations for a reading of 55.9. Together with the manufacturing equivalent, the composite PMI fell to 53.5, from 55.9, which is the softest in 12 months. Additionally, the Kansas City Fed Manufacturing Index fell to -9 from -1 in December, missing expectations for +1.

In a much anticipated move last week, the Fed raised interest rates for the first time in almost a decade, while emphasising that future hikes would be gradual. Richmond Fed president Jeffrey Lacker said on Friday that the anticipated four interest rate hikes for 2016 is half the pace of Fed hikes in the last tightening cycle.

"US economic data was on the weak side of expectations," ANZ Bank New Zealand senior economist Philip Borkin and senior foreign exchange strategist Sam Tuck said in a note. "The run of data weakness continues to reinforce the gradual message."

The New Zealand dollar is likely to be supported today by strong November migration data released at 10:45am, said ANZ, which expects the kiwi to trade between 66.70 US cents and 67.50 cents.

Also scheduled for publication today is the Westpac McDermott Miller fourth quarter consumer confidence survey at 10am, and November credit card spending data at 3pm.

The New Zealand dollar fell to 93.60 Australian cents from 93.91 cents on Friday, advanced to 45.08 British pence from 44.88 pence, edged up to 61.85 euro cents from 61.72 cents, and gained to 4.3572 yuan from 4.3378 yuan.

It slipped to 81.49 yen from 82.29 yen on Friday after the Bank of Japan on Friday extended the duration of bonds it would buy to 12 years from 10 years.


© Scoop Media

Business Headlines | Sci-Tech Headlines


FMA: Files Civil Proceedings Against Kiwibank For False Or Misleading Representations Over Fee Waivers

The Financial Markets Authority (FMA) - Te Mana Tātai Hokohoko has filed High Court civil proceedings against Kiwibank for making false and/or misleading representations, under the fair dealing provisions of the Financial Markets Conduct Act (FMC Act)... More>>


What Lies Beneath: Is The Housing Market Turning?
Rising interest rates, combined with further tightening of credit availability appear to be dampening the enthusiasm of investors and first home buyers. While house values continue to rise, what lies beneath QV's latest figures is growing evidence that price pressure has shifted... More>>

R&NTU: KiwiRail strike notices withdrawn following new offer

Strike notices on KiwiRail have been withdrawn. Rail and Maritime Transport Union General Secretary Wayne Butson says following negotiations between the RMTU and KiwiRail, a new offer from KiwiRail will be taken back to union members for ratification... More>>

Reserve Bank: Deputy Governor Reflects On Time At RBNZ
Central bankers must continue to look forward to guard against the unpredictable, Deputy Governor Geoff Bascand says in a speech published today. Mr Bascand joined the Reserve Bank of New Zealand – Te Pūtea Matua in 2013 during the aftermath of the Global Financial Crisis... More>>

Xero: Data Reveals ICT Expenditure Key To Small Business Sales Growth
Xero, the global small business platform, today released a new report which shows New Zealand small business ICT expenditure has increased 25 percent compared to pre-pandemic levels - more than the UK (20%) and Australia... More>>

Fonterra: Lifts Forecast Farmgate Milk Price Range And Revises Earnings Guidance At First Quarter Update

Fonterra Co-operative Group today lifted its 2021/22 forecast Farmgate Milk Price range, reported a solid start to the 2022 financial year and revised its earnings guidance... More>>

Canterbury Museum: New Research - Bald Haast's Eagle Feasted On Moa Guts

New Zealand’s extinct Haast’s Eagle (Hieraaetus moorei), the largest known eagle, gulped down viscera like a vulture and may even have been bald, new research suggests... More>>