Scoop has an Ethical Paywall
Work smarter with a Pro licence Learn More

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

 

NZ dollar falls as market weighs 'hawkish'

NZ dollar falls as market weighs 'hawkish' Yellen comments, weaker business confidence

By Jonathan Underhill

Sept. 27 (BusinessDesk) - The New Zealand dollar fell against the US dollar, touching a three-week low, after Federal Reserve chair Janet Yellen said the central bank needs to push on with gradual rate hikes despite weak inflation.

The kiwi dropped to 72.04 US cents as at 8am in Wellington, and earlier touched 71.67 cents, from 72.45 cents late yesterday. The trade-weighted index fell to 75.75 from 75.91.

In a speech to the US National Association of Business Economics, Yellen said there was a risk the labour market would become overheated without further increases in the fed funds rate and that "persistently easy policy can hurt financial stability". Newly appointed Atlanta Federal Reserve Bank president Raphael Bostic also signalled a willingness to tighten monetary policy, saying there were more consistent signs of inflation.

"While the local focus is obviously election-related, and we suspect ongoing uncertainty will at least cap the upside until (there is) more clarity, we were reminded overnight of far bigger forces shaping currency direction, namely that the US Fed still plans to ‘get on with it’," said Sharon Zollner, senior economist at ANZ Bank New Zealand, in a note. "Chair Yellen tried to strike a balanced tone in her speech overnight, but was tilted towards the hawkish side."

The kiwi fell yesterday after business confidence fell to a net zero reading with as many pessimists as optimists. According to the ANZ Business Outlook survey, the September result is down from a net 18.3 percent of firms that expected general business conditions to improve over the coming year in August.

Advertisement - scroll to continue reading

Are you getting our free newsletter?

Subscribe to Scoop’s 'The Catch Up' our free weekly newsletter sent to your inbox every Monday with stories from across our network.

With no clear winner in Saturday's election and now both the National Party and Labour-Green bloc are vying to form a government with New Zealand First, leading to all manner of media speculation in the interim.

The kiwi traded at 61.06 euro cents from 61.08 cents late yesterday. It traded at 80.80 yen from 80.78 yen, fell to 53.55 British pence from 53.73 pence and rose to 91.29 Australian cents from 91.17 cents. It slipped to 4.7807 yuan from 4.7926 yuan.

(BusinessDesk)

ends

© Scoop Media

Advertisement - scroll to continue reading
 
 
 
Business Headlines | Sci-Tech Headlines

 
GenPro: General Practices Begin Issuing Clause 14 Notices

GenPro has been copied into a rising number of Clause 14 notices issued since the NZNO lodged its Primary Practice Pay Equity Claim against General Practice employers in December 2023.More

SPADA: Screen Industry Unites For Streaming Platform Regulation & Intellectual Property Protections

In an unprecedented international collaboration, representatives of screen producing organisations from around the world have released a joint statement.More

 
 
 
 
 
 
 
 
 
 
 
 

Join Our Free Newsletter

Subscribe to Scoop’s 'The Catch Up' our free weekly newsletter sent to your inbox every Monday with stories from across our network.