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

UK New Zealander Stella Duffy awarded an OBE for services to the Arts

14 Jun 2016 Arts
Celebrated writer, theatremaker and Fun Palaces Co-Director Stella Duffy will receive... more

NZ gears up for the global space economy

14 Jun 2016 News
New Zealand Government Hon Steven JoyceMinister for Economic Development 14 June 2016 NZ gears up for the global space economy The... more

Business

NZ dollar drops vs. Australian dollar

7 Jun 2016 Business News By Johnathan Underhill
Article - BusinessDesk NZ dollar drops vs. Australian dollar on lack of RBA rate cut By Jonathan Underhill June 7 (BusinessDesk) -... more

NZ wholesale trades shrinks for second quarter

7 Jun 2016 Business News By Paul McBeth
Article - BusinessDesk Tuesday 07 June 2016 11:15 AM NZ wholesale trades shrinks for second quarter as agri sector weighs on basic... more

Living

REVIEW: Modern Maori Quartet steals the hearts of Londoners

8 Jun 2016 Entertainment By Charlotte Everett
The Modern Maori Quartet won over the hearts of homesick Kiwis and new friends with their debut London show on June 3rd. Fresh from... more

NZ-themed Salisbury Festival now open

29 May 2016 Arts
The Ageas Salisbury International Arts Festival, recently awarded silver for Best Tourism Event in South West Tourism Awards, is now... more

Property

Record annual profit for Kiwi Property

16 May 2016 Property
By Jonathan Underhill May 16 (BusinessDesk) - Kiwi Property Group, the country's biggest listed property investor by market value,... more

Record annual profit for Kiwi Property

16 May 2016 Property
Portfolio gain, rental income growth delivers record annual profit for Kiwi Property By Jonathan Underhill May 16 (BusinessDesk) -... more

Migration

Kiwis could be affected by tighter UK rules

30 Mar 2016 Migration By Audrey Young
British High Commissioner Jonathan Sinclair is defending changes to skilled migrant rules for Britain but suggests they won't affect... more

Immigrants' attitudes to corruption worries SFO

17 Feb 2016 Migration By Sophie Boot
Feb. 17 (BusinessDesk) - New Zealand's record inbound migration has undermined the country's squeaky-clean reputation because of an... more

Travel

More funding for the New Zealand Cycle Trail

3 Jun 2016 Travel & Tourism
New Zealand Government   Rt Hon John Key Prime MinisterMinister of Tourism 3 June 2016 More funding for the New Zealand... more

Jucy plans to expand pod-style hotel chain to Australia

16 May 2016 NZ Tourism
Article - BusinessDesk Monday 16 May 2016 12:20 PM Jucy plans to expand pod-style hotel chain to Australia in 2017 By Fiona... more

Sport

Richie McCaw: 148

22 Jun 2016 Sport
Upstart Press   Richie McCaw: 148 148 tests 131 wins 110 times captain of the All Blacks 2 Rugby World Cup triumphs 12... more

Depleted Pulse bolster stocks for challenging road trip

23 Jun 2016 Netball
Netball Central June 23, 2016Depleted Pulse bolster stocks for challenging road trip Not for the first time this season, Central... more

Columns

Gordon Campbell on our refugee response, and a TPP rewrite

14 Jun 2016 Opinion
Column - Gordon Campbell   Gordon Campbell on our paltry refugee response and a brazen US rewrite of the TPP First published at... more

Gordon Campbell on Muhammad Ali

7 Jun 2016 Opinion By Gordon Campbell
As with Bob Dylan, Muhammad Ali changed the times in which he lived so thoroughly that anyone coming along afterwards will probably... more

Kiwi Success

New Ambassador to Belgium named

23 Jun 2016 Appointments
New Zealand Government Hon Murray McCully Minister of Foreign Affairs   23 June 2016 Media Statement New Ambassador to Belgium... more

New appointments to Vulnerable Children’s Board

12 May 2016 Appointments
New Zealand Government Hon Anne Tolley Minister for Social Development 12 May 2016 New appointments to Vulnerable Children’s... more

Recruitment

Zero-hour contracts gone, PPL extended

10 Mar 2016 Recruitment
New Zealand Government Hon Michael Woodhouse Minister for Workplace Relations and Safety 10 March 2016 Zero-hour contracts gone, PPL... more

Scheme helping to staff hard to fill positions

28 Feb 2016 Recruitment
New Zealand Government Scheme helping to staff hard to fill positions Health Minister Jonathan Coleman says an incentive scheme... more

s