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

 

NZ dollar heads for 1.5% decline as final vote tally looms

NZ dollar heads for 1.5% weekly decline as final vote tally looms, greenback gains

By Rebecca Howard

Oct. 6 (BusinessDesk) - The New Zealand dollar is heading for a 1.5 percent fall this week ahead of tomorrow's final vote count and as hopes for US tax reforms and rate hikes push up the greenback.

The kiwi traded at 70.96 as a 5pm in Wellington versus 71.13 cents as at 8am and from 71.53 cents yesterday. It traded at 72.05 cents in New York last Friday. The trade-weighted index declined to 75.23 from 75.55 yesterday.

The greenback got a lift Friday after the Republican-controlled House of Representatives narrowly approved a fiscal 2018 spending blueprint containing a legislative tool enabling a tax bill to pass by a simple majority vote in the Senate, where they hold 52 of 100 seats, according to Reuters. The vote was viewed as being one step nearer to the tax reform. The focus is also on US job data for September, which is expected to show the world's biggest economy only added 90,000 jobs last month versus 156,000 in August, after the hurricane impact.

"They have placed the bar so low it's making a beat quite possible and if we have a miss they will just attribute it to noise around the weather," said Sheldon Slabbert, a trader at CMC Markets. "Notwithstanding some noise around the number, I think the market will just revert to the over-riding themes at the moment, which are tax cuts and Fed hikes."

Recent solid data out of the US and comments from Federal Reserve officials have increased expectations of a US rate hike in December. Against a backdrop where the rate differential narrows between the US and New Zealand, the kiwi will get squeezed, said Slabbert.

New Zealand's two-year swap rate rose 1 basis point to 2.20 percent, and 10-year swaps rose 2 basis point to 3.25 percent.

Domestically, investors will be watching for the final general election vote count tomorrow, meaning political parties will be able to kick off formal negotiations to form a government. Slabbert said if the eventual government is led by the incumbent National Party it will be positive for the kiwi whereas if it is led by a Labour-Green coalition the currency might lose some ground. Any move, however, will be short-lived "given that the US dollar is on the march higher."

The kiwi traded at 60.65 euro cents from 60.84 cents yesterday. The local currency rose to 54.26 British pence from 54.01 pence yesterday and was at 91.51 Australian cents from 91.37 cents yesterday. It traded at 4.7212 Chinese yuan from 4.7591 yuan and dropped to 80.09 yen from 80.64 yen yesterday.

(BusinessDesk)

© Scoop Media

 
 
 
Business Headlines | Sci-Tech Headlines

 

Reserve Bank: Ongoing Monetary Tightening
The Monetary Policy Committee today increased the Official Cash Rate (OCR) to 3 percent from 2.5 percent. The Committee agreed it remains appropriate to continue to tighten monetary conditions... More>>



Statistics: Weekly Earnings Rise As More In Full-time Employment

Median weekly earnings from wages and salaries rose by 8.8 percent to $1,189 in the year to the June 2022 quarter, Stats NZ said today... More>>



Bell Gully: Uncertainty Ahead With New Unconscionable Conduct Legislation

new prohibition against ‘unconscionable conduct’ in trade is one of a number of changes to the Fair Trading Act 1986 that come into force from 16 August 2022. The new prohibition may have wide-ranging implications for many businesses... More>>


Electricity Authority: Imposes Interim Restrictions On Very Large Electricity Contracts

Consumers of electricity will be protected from potentially paying more than they should due to the impact of very large electricity contracts on wholesale prices, under urgent changes announced today by the Electricity Authority... More>>


Westpac: Economic Overview, August 2022 – Pushing Through

The New Zealand economy faces some lean growth in the year ahead as households’ budgets are squeezed, according to Westpac’s latest Economic Overview... More>>


Kiwi Group Holdings: Fisher Funds Acquires Kiwi Wealth Business

Kiwi Group Holdings Limited (KGHL) today announced the sale of Kiwi Wealth to Fisher Funds for NZ$310 million... More>>