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

 

NZ dollar rangebound after Fed signals unwinding

NZ dollar rangebound after Fed signals unwinding, election still in focus

By Rebecca Howard

Sept. 21 (BusinessDesk) - The New Zealand dollar gave up earlier gains after the US Federal Reserve announced a plan to start shrinking its balance sheet and signalled one more rate hike later this year, remaining rangebound ahead of Saturday's general election.

The kiwi traded at 73.21 US cents as at 5pm versus 73.50 US cents as at 8am and from 73.12 cents before yesterday's poll showing the incumbent National Party in the lead. The trade-weighted index was at 76.53 from 75.97 yesterday.

The US dollar gained ground during the Asian trading session after the Fed said it would begin in October to dial back its US$4.5 trillion stockpile of assets and also signalled it still expects one more interest rate hike by the end of the year.

"It's pretty hard to be bullish kiwi. If you think the Reserve Bank's on hold and our rates are at 1.75 percent and by the middle of next year, or the end of next year the Fed rate is going to be 2.25 percent then where are you going to be parking your money?", said Tim Kelleher, head of institutional foreign exchange sales at ASB Bank.

Kelleher said investors will be watching for the latest Newshub-Reid Research poll due at 6pm. However, he noted polling has been volatile and "I wouldn't get too excited about the weekend yet as anything could happen." Yesterday's 1News Colmar Brunton poll yesterday showed the National Party rose six points to 46 percent compared to last week's poll while Labour fell seven points to 37 percent.

The kiwi remained firm against the Australian dollar, trading at 91.54 Australian cents versus 91.10 cents yesterday on the back of some weakness in commodity prices, in particular iron ore, said Kelleher. "That's holding the kiwi-Aussie cross up a bit," he said. The domestic second-quarter gross domestic product data didn't move the market after the 0.8 percent on quarter growth was in line with expectations.

The kiwi was at 82.31 yen from 81.43 yen. The Bank of Japan left its monetary policy unchanged Thursday, signalling the central bank's confidence it will meet its 2 percent inflation target. It was at 4.8238 Chinese yuan from 4.7978 yuan. It gained to 54.29 British pence from 54.03 pence yesterday and advanced to 61.61 euro cents from 60.84 cents.

The two-year swap rate was unchanged at 2.24 percent while 10-year swaps rose 2 basis points to 3.29 percent.

(BusinessDesk)

© Scoop Media

 
 
 
Business Headlines | Sci-Tech Headlines

 

Stats NZ: Consents For New Homes At All-Time High

A record 41,028 new homes have been consented in the year ended March 2021, Stats NZ said today. The previous record for the annual number of new homes consented was 40,025 in the year ended February 1974. “Within 10 years the number of new homes ... More>>

Stats NZ: Unemployment Declines As Underutilisation Rises

The seasonally adjusted unemployment rate decreased to 4.7 percent in the March 2021 quarter, continuing to fall from its recent peak of 5.2 percent in the September 2020 quarter but remaining high compared with recent years, Stats NZ said today. ... More>>

ALSO:

Digitl: The Story Behind Vodafone’s FibreX Court Ruling

Vodafone’s FibreX service was in the news this week. What is the story behind the Fair Trading Act court case? More>>

Reserve Bank: Concerned About New Zealand's Rising House Prices

New Zealand house prices have risen significantly in the past 12 months. This has raised concerns at the Reserve Bank of New Zealand – Te Putea Matua about the risk this poses to financial stability. Central banks responded swiftly to the global ... More>>

Westpac: Announces Strong Financial Result

Westpac New Zealand (Westpac NZ) [i] says a strong half-year financial result has been driven by better than expected economic conditions. Chief Executive David McLean said while the global COVID-19 pandemic was far from over, the financial effect on ... More>>

MYOB: SME Confidence In Economic Performance Still Cautious

New insights from the annual MYOB Business Monitor have shown the SME sector is still cautious about the potential for further economic recovery, with two-in-five (41%) expecting the New Zealand economy to decline this year. The latest research ... More>>