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

 

NZ dollar little changed

NZ dollar little changed; RBA's Lowe says he's prepared to cut rates


By Jenny Ruth

July 25 (BusinessDesk) - The New Zealand dollar was little changed after receiving a boost in the middle of the day after Reserve Bank of Australia governor Philip Lowe said he’s prepared to ease monetary policy further if needed.

The kiwi was trading at 66.95 US cents at 5pm in Wellington from 67.07 cents at 8am, which was also the day’s high. The trade-weighted index eased to 73.39 points from 73.50.

“If demand growth is not sufficient, the board is prepared to provide additional support by easing monetary policy further,” Lowe said in a speech to a charitable foundation lunch.

“Whether or not further monetary easing is needed, it is reasonable to expect an extended period of low interest rates,” he said.

Peter Cavanaugh, the senior client advisor at Bancorp Treasury Services, says Lowe's comments had pushed the Australian dollar lower and lifted the New Zealand dollar.

“The market read it as positioning for more easing,” Cavanaugh says. “It’s a central banker saying it might go down but it’s not going up for a while.”

Lowe’s speech followed yesterday’s call by Westpac chief economist in Sydney, Bill Evans, that the RBA will cut rates twice more, once in September or October and then again in early 2020.

The RBA’s cash rate is already at a record low 1 percent. If Evans is right, it will be down to 0.5 percent by early next year.

“He’s got a lot of credibility on that subject,” having made correct calls in the past, Cavanaugh says.

But the RBA is just one among many central banks expected to cut interest rates. The market has fully priced in a 25 basis-point cut by the Federal Reserve next week and economists are forecasting our central bank will cut its official cash rate in August. The rate is at a record low 1.5 percent following a cut in May.

The New Zealand dollar was trading at 96.05 Australian cents from 96.12, at 53.68 British pence from 53.72, at 60.12 euro cents from 60.22, at 72.40 yen from 72.57 and at 4.6038 Chinese yuan from 4.6089.

The New Zealand two-year swap rate eased to 1.2613 percent from 1.2927 yesterday, while the 10-year swap rate fell to 1.6900 percent from 1.7275.

(BusinessDesk)

© Scoop Media

 
 
 
Business Headlines | Sci-Tech Headlines

 

NIWA: Scientists Say Methane Emitted By Humans ‘vastly Underestimated’

NIWA researchers have helped unlock information trapped in ancient air samples from Greenland and Antarctica that shows the amount of methane humans are emitting into the atmosphere from fossil fuels has been vastly underestimated... More>>

ALSO:

SMC Expert Reaction: Record Dry Spells And Effects On Forests

With no rain forecast before Sunday, Auckland is about to break a record for the city's longest dry spell. Niwa says Auckland is likely to hit 40 consecutive days without rain this weekend . The upper North Island is seeing severe meterological ... More>>

ALSO:

Reserve Bank: Official Cash Rate Remains At 1.0 Percent

The Monetary Policy Committee has decided to keep the Official Cash Rate (OCR) at 1.0 percent. Employment is at or slightly above its maximum sustainable level while consumer price inflation is close to the 2 percent mid-point of our target range. ... More>>

ALSO:



Science Media Centre: Novel Coronavirus Detected In China – Expert Reaction

The virus was detected after more than 40 people were hospitalised with pneumonia in Wuhan City, China and the outbreak traced to a large animal and seafood market. The Centers for Disease Control and Prevention reports that person-to-person transmission ... More>>

ALSO:

Science Media Centre: Flooding could release toxic gas – Expert Reaction

A chemical substance known as ouvea premix stored at an old paper mill in Mataura could release toxic ammonia gas if it comes in contact with water.More>>

ALSO: