NZ dollar pares gains after Bernanke fails to signal QE3   8 Jun 2012

Hannah Lynch

The New Zealand dollar fell from a one-month high after Federal Reserve Chairmen Ben Bernanke failed to signal further quantitative easing for the US, damping kiwi sentiment that had been lifted by China's unexpected interest cuts.

The New Zealand dollar fell to 76.65 US cents from 77.05 cents at 5pm yesterday. It rose as high as 77.52 US cents overnight, the highest since May 11 on speculation a Chinese rate cut will underpin the world’s fastest-growing major economy. The trade weighted index decreased to 69.90 from 70.07.

The New Zealand dollar rallied after China, New Zealand's second-largest export market, unexpectedly cut its interest rate to 0.25 percent, effective tomorrow. That's the first time the People's Bank of China has cut rates since 2008. Bernanke helped erase the kiwi's advances after signaling the world's largest economy remains at risk from Europe's debt crisis, even as he failed call to for consideration of additional stimulus.

"Broadly speaking the good cancelled out the bad leaving the New Zealand dollar where we were yesterday," said Mike Jones, market strategist at Bank of New Zealand. "Bernanke caused some late US dollar strength.”

Bernanke's comments were at odds with Fed Reserve Vice Chairman Janet Yellen's speech on Wednesday. Yellen said the US “remains vulnerable to setbacks” and may warrant more accommodation.

The Federal Open Market Committee will meet on June 19-20. Earlier this year the committee pledged to keep interest rates low until at least 2014.

The kiwi to fell to 77.53 Australian cents from 77.43 cents yesterday at 5pm after New Zealand's largest trading partner unexpectedly added 39,000 jobs in May. That comes just one day after Australia posted annual gross domestic product growth of 4.3 percent, beating economists' forecasts.

The Reserve Bank of Australia decision this week to cut the target cash rate a quarter point to 3.5 percent has also buoyed sentiment for Australia’s currency.

“For today, the NZD will continue to look across the Tasman for direction," Jones said.

Australian trade balance figures are set for release, while RBA Governor Glenn Stevens is scheduled to make a speech this afternoon.

In New Zealand, the March quarter’s wholesale trade survey will be release by Statistics New Zealand this morning.

The New Zealand dollar fell to 61.10 euro cents from 61.33 cents yesterday at 5pm. The kiwi dropped to 49.44 British pence from 49.81 pence and was little changed on 61.09 yen from 61.16 yen.

(BusinessDesk)

Add a comment

Bookmark and Share

News

Regeneration the focus of Christchurch governance

2 Jul 2015 Canterbury Earthquake
The regeneration of Christchurch will be the city’s focus for the next five years as local leadership progressively takes... more

Government Welcomes Successful WTO Trade Policy Review

2 Jul 2015 News
Government Welcomes Successful WTO Trade Policy Review Trade Minister Tim Groser today welcomed the conclusions of the 5th World... more

Business

TPP too big to fail, says visiting US trade deal specialist

2 Jul 2015 Business News By Fiona Rotherham
  TPP too big to fail, says visiting US trade deal specialist Petri July 2 (BusinessDesk) - Too much political capital has been... more

MARKET CLOSE: NZ shares gain, led by A2 as bidders named

24 Jun 2015 Business News
Article - BusinessDesk   MARKET CLOSE: NZ shares gain, led by A2 as potential bidder unmasked; dividends appeal By Jonathan ... more

Living

Remarkables ski area to kick off 2015 season this Saturday

24 Jun 2015 Lifestyle
The Remarkables June 24 2015 The Remarkables ski area to kick off 2015 season this Saturday The Remarkables ski area in Queenstown... more

SMCO-SOUNZ Composer Workshop selected works announced

23 Jun 2015 Lifestyle
SOUNZ For immediate release SMCO-SOUNZ Composer Workshop selected works announced SOUNZ and Auckland based St Matthews Chamber... more

Property

Extending Canterbury accommodation support

24 Jun 2015 Property
New Zealand Government Hon Anne Tolley Minister for Social Development 24 June 2015 Extending Canterbury accommodation... more

Arvida to buy three Auckland facilities for $62M

24 Jun 2015 Property
Article - BusinessDesk   Arvida to buy three Auckland facilities for $62M, raising new capital By Paul McBeth June 24 ... more

Migration

NZ migration rises to new annual record in May

22 Jun 2015 Migration By Suze Metherell
  NZ migration rises to new annual record in May, closing in on Treasury's upside scenario June 22 (BusinessDesk) - New Zealand... more

More visas online through Immigration ONLINE

16 Jun 2015 Migration
Immigration Minister Michael Woodhouse welcomes the roll out of online Work and Visitor visas as fantastic news for Immigration New ... more

Travel

Air NZ sees annual earnings rising by as much as 60%

24 Jun 2015 Travel & Tourism
Article - BusinessDesk   Air NZ sees annual earnings rising by as much as 60% By Paul McBeth June 24 (BusinessDesk) - Air New... more

Analysts divided on Jetstar impact on Air NZ's earnings

19 Jun 2015 Travel & Tourism
  Analysts divided on impact on Air NZ's earnings of Jetstar's regional routes challenge June 19 (BusinessDesk) - Analysts are... more

Sport

Wimbledon 2015: NZ Tennis players progress

2 Jul 2015 Sport
Kiwi Artem Sitak braves soaring temperatures and a lengthy battle to make it into the second round of doubles at Wimbledon.Kiwi Davis... more

Silver Ferns Netball World Cup team named

2 Jul 2015 Netball
Netball New Zealand (NNZ) National Selectors have picked a 12-strong Silver Ferns team featuring a mix of youth and experience to... more

Columns

Gordon Campbell on Tiwai Point, and saying “No” in Greece

2 Jul 2015 Opinion
Its hard to see how Rio Tinto’s one month delay in announcing its intentions about the Tiwai Point aluminium smelter is a good... more

Gordon Campbell on telling the poor to ask for more

24 Jun 2015 Column
Column - Gordon Campbell   Gordon Campbell on telling the poor to ask for more The government’s more

Kiwi Success

New Environment Protection Authority (EPA) board appointments

2 Jul 2015 Appointments
New Zealand Government Hon Dr Nick Smith Minister for the Environment New EPA board appointments Environment Minister Dr Nick Smith ... more

New Chair and Commissioners for Maori Language Commission

2 Jul 2015 Appointments
New Chair and Commissioners appointed to the Maori Language Commission The Maori Development Minister is pleased to announce that... more

Recruitment

Carpentry apprentices go head to head

23 Jun 2015 Recruitment
Apprentice of the Year Competition Carpentry apprentices go head to head in national competition Entries for the Registered Master ... more

NZ employees rate work-life balance as top priority

26 May 2015 Press Releases By Anna Lu
  NZ employees rate work-life balance as top priority, while job seekers eye cash, survey shows May 26 (BusinessDesk) - New... more