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

 

NZ dollar extends gain on Fed outlook, soft US data

By Rebecca Howard

June 21 (BusinessDesk) - The New Zealand dollar extended its gains against the greenback as weak US manufacturing data raised concern about a possible slowdown there.

The kiwi was trading at 65.89 US cents at 7:45 in Wellington versus 65.65 cents at 5pm yesterday. The trade-weighted index was at 72.05 from 72.03.

The US Federal Reserve yesterday joined global peers, including the European Central Bank and the Reserve Bank of Australia, in indicating that more policy stimulus is likely, which weighed on the US dollar. The greenback fell further overnight when the Philadelphia Fed’s manufacturing survey fell 16.3 points to 0.3 in June from 16.6 in May, adding to the view that the US manufacturing sector is slowing. "Current indicators suggest moderating growth," according to the survey.

Thursday's news that the domestic economy grew 0.6 percent in the March quarter also helped support the local currency in overnight trading.

"Kiwi continued on an upward trajectory after the 1Q GDP showed the economy remained on solid ground. Its run was supported by broad USD weakness on the back of the FOMC meeting. With GDP now out of the way, markets will be looking ahead to next week’s RBNZ meeting," said ANZ Bank FX/rates strategist Sandeep Parekh.

The Reserve Bank of New Zealand cut rates to a record low 1.50 percent in May and economists are expecting more rate cuts. Most, however, don't expect it to cut rates at next week's review - which is not accompanied by a full set of forecasts - but to indicate a cut is likely in August.

The main focus for markets, however, is the upcoming G-20 meeting in Japan and a meeting between President Donald Trump and President Xi Jinping. China said on Thursday it hoped U.S. officials "will create the necessary conditions and atmosphere for solving problems through dialogue as equals,” Reuters reported.

The kiwi was trading at 95.15 Australian cents from 95.26 cents late yesterday. It was at 51.86 British pence from 51.77, at 58.34 euro cents from 58.27, at 70.70 yen from 70.67, and at 4.5134 Chinese yuan from 4.5120.


© Scoop Media

 
 
 
Business Headlines | Sci-Tech Headlines

 

Consumer NZ Testing: Nine Sunscreen Brands Fail Protection Tests

Nine different brands fell short in the latest round of testing by Consumer NZ, which covered 20 products. More>>

ALSO:

Media: NZME 'In Discussions' To Buy Stuff

NZME confirms that it is in discussions with Stuff’s owners Nine and has put a proposal to the Government regarding a possible transaction. However, NZME notes that these discussions are preliminary... More>>

Consultation: Plan Of Action To Protect Seabirds

The draft National Plan of Action plan outlines the Government’s commitment to reducing fishing-related captures of seabirds, with clear goals and objectives, supported by an implementation plan. More>>

ALSO:

Housing Issues: Fairer Rules For Tenants And Landlords

The key changes include: - Limit rent increases to once every 12 months and banning the solicitation of rental bids by landlords. - Improve tenant’s security by removing a landlord’s right to use no cause terminations to end a periodic tenancy agreement... More>>

ALSO: