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

 

NZ dollar falls on eve of election

NZ dollar falls on eve of election as new North Korean threats weigh

By Rebecca Howard

Sept. 22 (BusinessDesk) - The New Zealand dollar fell heading into Saturday's general election on the back of ongoing sabre-rattling between the US and North Korea.

The kiwi traded at 72.83 US cents as at 5pm versus 73.11 US cents as at 8am in Wellington from 73.21 cents late yesterday. Still, it's virtually unchanged on the week. The trade-weighted index declined to 76.20 from 76.53.

Markets were nervous after North Korean Foreign Minister Ri Yong Ho said late Thursday in New York that the country may consider a nuclear test of “unprecedented scale” in the Pacific Ocean, according to South Korea’s Yonhap News Agency.

"Whether their missiles have the capability of going that far is anyone's guess but the markets have taken it seriously, we have seen risk off," said Mark Johnson, senior dealer at OMF.

The kiwi was trading at 81.41 Japanese yen versus 82.31 yen late yesterday as investors turned to the yen, widely viewed as a safe haven.

Johnson also noted that investors will have taken positions ahead of Saturday's election and may "just sit back and see how things unfold." The latest opinion polls show a very tight race, although the incumbent National Party is slightly ahead. Johnson said if the National Party is able to form a government there may be a relief rally in kiwi: "I get a sense that there's probably some reasonable interest to sell into that rally."

He noted that comments from Reserve Bank of Australian governor Philip Lowe, who said a rise in global interest rates has no automatic implications for Australia, may be echoed by New Zealand's central bank at Thursday's review. The Reserve Bank is expected to keep rates on hold at 1.75 percent.

"The RBNZ is clearly in no hurry to hike rates," said Johnson. "I think we will get a reasonably cautious message from the RBNZ next week so it's hard to see why the kiwi would race higher, especially if there is a risk-off event."

The New Zealand dollar was at 53.61 British pence from 54.29 pence yesterday and at 60.89 euro cents from 61.61 cents amid expectations Chancellor Angela Merkel's alliance will win this weekend's elections, giving her a fourth term in office.

The kiwi rose to 91.90 Australian cents from 91.54 cents as the Aussie was weighed on by Lowe's comments and falling iron-ore prices. It traded at 4.7991 yuan from 4.8238 yuan

The two-year swap rate fell 2 basis points to 2.22 percent and 10-year swaps were down 6 basis points to 3.23 percent.

(BusinessDesk)

© Scoop Media

 
 
 
Business Headlines | Sci-Tech Headlines

 

Statistics: Retail Card Spending Down 0.2 Percent In July
Retail card spending fell $11 million (0.2 percent) between June 2022 and July 2022, when adjusted for seasonal effects, Stats NZ said today... More>>




Barfoot & Thompson: Auckland Rental Prices Inch Up Again, But Upward Trend Could Ease In Coming Months

Data from nearly 16,000 rental properties managed by real estate agency Barfoot & Thompson shows Auckland’s average weekly rent rose by $6.12 (or 1 percent) during the second quarter... More>>

ComCom: Draft Report Says Regulatory System Favours Established Building Products
The Commerce Commission’s draft report into competition in the residential building supplies industry has identified two main factors negatively impacting competition... More>>


Commerce Commission: Draft Determination On News Publishers’ Association’s Collective Bargaining Application
The Commerce Commission (Commission) has reached a preliminary view that it should allow the News Publishers’ Association of New Zealand (NPA) to collectively negotiate with Meta and Google... More>>


Heartland: Retirees Facing Pressure From Higher Cost Of Living And Increasing Debt In Retirement

Heartland has seen a significant increase in Reverse Mortgages being used to repay debt. Among the most affected by the increasing living costs are retirees, many of whom are trying to get by on NZ Super alone... More>>


APEC: Region’s Growth To Slow Amid Uncertainties And Crises
Economic growth in the APEC region is expected to slow this year amid soaring inflation, a protracted war in Ukraine and heightened uncertainties, on top of the continuing impact of the pandemic and virus mutations that are draining resources, according to a new report by the APEC Policy Support Unit... More>>