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

Labour announces unemployment policy

30 Jul 2014 Politics
Labour’s intention to increase the minimum wage to two-thirds of the average wage would hurt business, cost jobs and reduce ... more

MOU signed to improve agency cooperation

30 Jul 2014 News
Police Minister Anne Tolley and Commerce Minister Craig Foss today welcomed an updated memorandum of understanding (MOU) between the... more

Business

Border system reaches further milestone

28 Jul 2014 Business News
Customs Minister Nicky Wagner today welcomed the Joint Border Management System reaching another milestone. More than 50 per cent ... more

Auckland Airport cuts fine deal in US$250M bond issue

25 Jul 2014 Business News
Article - BusinessDesk   Auckland Airport cuts fine deal in US$250M bond issue By Paul McBeth Jul. 25 (BusinessDesk) - Auckland... more

Living

Cliff Curtis’ Startling Confession in Mana Magazine

28 Jul 2014 Lifestyle
The new-look Mana magazine includes a story on Hollywood star and Rotorua local, Cliff Curtis. The famously versatile actor talks... more

NZ Film 'The Dead Lands' to Have Toronto World Premiere

23 Jul 2014 Entertainment
New Zealand Film Commission New Zealand Film 'The Dead Lands' to Have Toronto World Premiere Maori action epic The Dead Lands will... more

Property

NZ house sales fall in June, led by cheaper properties

14 Jul 2014 Property By Suze Metherell
July 14 (BusinessDesk) - New Zealand house sales fell in June from a year earlier, led by properties of $400,000 or less, indicating... more

Average Auckland house prices reach record level

10 Jul 2014 Property
The average asking price for a home in Auckland has reached the record level of 732 thousand, 240 dollars. The figure is provided by... more

Migration

UK Tier 1 visa extension deadline looming

11 Jul 2014 Migration
If you’re in the UK on a Tier 1 (General) visa, you’ll need to apply for an extension as soon as possible. The deadline... more

NZ more appealing to ex-pats - survey

10 Jul 2014 Migration
Auckland and Wellington have become more appealing to ex-pats in the past 12 months, a new survey has found. Both cities both dropped... more

Travel

NZ leaves lasting impression on English Premier League teams

29 Jul 2014 Travel & Tourism
27 Jul 2014 West Ham United may have endured a torrid time on the pitch during their time in New Zealand for the Football United... more

Cycleways bring economic benefit to communities

24 Jul 2014 Travel & Tourism
An increasing number of cycleways are attracting tourists to regions and scenic parts of New Zealand and a special session at the... more

Sport

2014 GLASGOW: GOLD FOR BOYLE AND PASCOE

30 Jul 2014 Commonwealth Games
Auckland swimmer Lauren Boyle bounced back from last night’s disappointment to win the women’s 400m freestyle gold medal... more

2014 GLASGOW: GREAT DAY FOR MOUNTAIN BIKERS

30 Jul 2014 Commonwealth Games
Anton Cooper and Sam Gaze brought cheers from their New Zealand supporters when they won gold and silver in the men’s mountain... more

Columns

Gordon Campbell on Gaza and burning the Israeli flag

24 Jul 2014 Opinion By Gordon Campbell
One of the selling points in New Zealand’s campaign for a temporary seat on the Security Council is that we have a pluckily... more

7 highly effective habits to stay healthy at work

23 Jul 2014 Column By Tricia Alach
The holistic helper's guide to wellbeing and work: part eight Like all good reports, my Wellbeing and Work series comes with an... more

Kiwi Success

Hon.Judith Collins announces appointments to Public Trust Board

23 Jul 2014 Appointments
New Zealand Government Appointments to Public Trust Board   Justice Minister Judith Collins today announced the appointment of ... more

NZ Government Minister Foss announces commerce reappointments

23 Jul 2014 Appointments
Commerce Minister Craig Foss today announced four reappointments to various independent Crown entities and statutory... more

Recruitment

200 more training places for graduate nurses

30 Jul 2014 Recruitment
Health Minister Tony Ryall has announced the government will fund up to 200 additional training places for nurse graduates next... more

750 additional Trades Academy places for 2015

14 Jul 2014 Recruitment
New Zealand Government   Hon Steven Joyce Minister for Tertiary Education, Skills and Employment Hon Hekia Parata Minister of... more