NZ dollar rises after weak US data ahead of Fed   28 Jan 2015

Article - BusinessDesk

NZ dollar rises after weak US data ahead of Fed interest rate decision

By Tina Morrison

Jan. 28 (BusinessDesk) - The New Zealand dollar rose after weaker US data raised concerns the Federal Reserve may push out plans to raise interest rates this year.

The kiwi advanced to 74.45 US cents at 8am in Wellington, from 74.19 cents at 5pm yesterday. The trade-weighted index was little changed at 76.70 from 76.75 yesterday.

The US dollar index, which measures the greenback against a basket of currencies, fell after a report showed a decline in US durable goods orders. The non-defence capital goods orders excluding aircraft, a proxy for business spending plans, fell 0.6 percent in December following a similar drop in November. The data comes ahead of the Federal Reserve Open Market Committee's decision on interest rates, scheduled for release tomorrow morning New Zealand time.

"The US dollar weakened after weak durable goods data and as markets pared back positions ahead of the FOMC," ANZ Bank New Zealand senior economist Mark Smith and senior FX strategist Sam Tuck said in a note. "Weakness in durable goods data suggests that business investment likely contracted in the fourth quarter, which looks to slow growth momentum. The issue for markets and policymakers is the extent that the US economic expansion can roll on despite a number of headwinds.

"Sharp increases in the US dollar and weakness in global markets appear to be hitting the bottom line, with weaker than expected corporate earnings reported by a number of large US companies. While markets are worried lower earnings will feed into cuts to investment spending and layoffs, it is still early days. Markets await the FOMC tomorrow for direction."

The kiwi will probably trade between 73.70 US cents and 75 cents today, ANZ said.

New Zealand Prime Minister John Key will today outline his government’s plans to overhaul social housing in his first major speech of 2015. Labour Party leader Andrew Little gave his State of the Nation speech, and said a government he leads would target bringing down the unemployment rate.

Traders are awaiting the New Zealand Reserve Bank's decision on interest rates tomorrow. While no change to the 3.5 percent benchmark rate is expected, some economists expect the bank to remove its tightening bias.

The New Zealand dollar rose to 93.96 Australian cents from 93.51 cents yesterday ahead of Australian fourth quarter inflation figures today. A weak inflation number may fuel speculation the Reserve Bank of Australia could cut interest rates when it meets next Tuesday.

The kiwi slipped to 48.96 British pence from 49.14 pence yesterday even though UK fourth quarter gross domestic product data showed the economy slowed more than expected. The UK economy expanded 0.5 percent in the fourth quarter, from a 0.7 percent pace in the third quarter and lower than the 0.6 percent pace expected.

The local currency slipped to 65.53 euro cents from 66.02 cents yesterday and was little changed at 87.71 yen from 87.70 yen.

(BusinessDesk)

Add a comment

News

Hilary Timmins' Award-Winning UK Documentary Series To Inspire NZ Students

29 Jun 2020 Education
Dream Catchers, produced and directed by Hilary Timmins, celebrates the success stories of more than thirty inspirational New... more

New Zealand reaffirms support for Flight MH17 judicial process

7 Mar 2020 News By Rt HON WINSTON PETERS
Ahead of the start of the criminal trial in the Netherlands on 9 March, Foreign Minister Winston Peters has reaffirmed the need to... more

Business

NZ Government's Economic package to fight COVID-19

17 Mar 2020 Business News By RT HON JACINDA ARDERN
The Coalition Government has launched the most significant peace-time economic plan in modern New Zealand history to cushion the... more

NZ Government announces aviation relief package

19 Mar 2020 Business News By Hon Phil Twyford
Transport Minister Phil Twyford today outlined the first tranche of the $600 million aviation sector relief package announced earlier... more

Living

Diversity was Key at New Zealand Trade Tasting in London

6 Jun 2022 Food & Wine
New Zealand Winegrowers Annual Trade Tasting was recently held in London, on Wednesday 4 May, in Lindley Hall. It was the first... more

Kiwi author stuns Behind the Butterfly Gate

12 Jan 2022 Arts By Charlotte Everett
Hidden behind the Butterfly Gate is where the secret has been kept for 76 years...  New Zealand writer Merryn Corcoran’s... more

Property

Fairer rules for tenants and landlords

17 Nov 2019 Property By Minister Kris Faafoi
17 NOVEMBER 2019 The Government has delivered on its promise to the over one million New Zealanders who now rent to make it fairer... more

New Zealand Government will not implement a Capital Gains Tax

17 Apr 2019 Property By RT HON JACINDA ARDERN
The Coalition Government will not proceed with the Tax Working Group’s recommendation for a capital gains tax, Jacinda Ardern... more

Migration

Boosting border security with electronic travel authority – now over 500,000 issued

19 Nov 2019 Migration By Hon Iain Lees-Galloway
19 NOVEMBER 2019 We’ve improved border security with the NZeTA, New Zealand Electronic Travel Authority, which helps us to... more

Christchurch reinstated as refugee settlement location

18 Aug 2018 Migration
18 AUGUST 2018 HON IAIN LEES-GALLOWAY The announcement that Christchurch can once again be a settlement location for refugees... more

Travel

Gallipoli Anzac Day services cancelled

19 Mar 2020 Travel & Tourism By RT HON JACINDA ARDERN
The New Zealand and Australian Governments have announced this year’s joint Anzac Day services at Gallipoli will be cancelled... more

New Zealanders advised not to travel overseas

19 Mar 2020 Travel & Tourism
New Zealanders advised not to travel overseas more

Sport

The Skipper's Diary: Sir Richard Hadlee honouring his father and NZ's Forty-Niners

27 Oct 2019 Cricket By Charlotte Everett
NZNewsUK London Editor Charlotte Everett spoke to Sir Richard Hadlee about why he’s chosen to publish his father’s... more

PREVIEW: All Blacks v England semi-final

26 Oct 2019 Rugby
The two most convincing quarterfinals winners are set to square off in a semifinal showdown for the ages when the All Blacks meet old... more

Columns

Gordon Campbell on the Gareth Morgan crusade

11 Nov 2016 Opinion
Gordon Campbell on the Gareth Morgan crusade First published on Werewolf The ghastly likes of Marine Le Pen in France and Geert ... more

Gordon Campbell on the US election outcome

10 Nov 2016 Opinion
Column - Gordon Campbell   Gordon Campbell on the US election outcome Well um.. on the bright side, there (probably)... more

Kiwi Success

Congratulations to Loder Cup winner

26 Sep 2018 People By Hon Eugenie Sage
25 SEPTEMBER 2018 The Loder Cup, one of New Zealand’s oldest conservation awards, has been awarded to Robert McGowan for 2018... more

Appointments to New Zealand National Commission for UNESCO

16 Aug 2018 Appointments
16 AUGUST 2018Appointments to New Zealand National Commission for UNESCO HON JENNY SALESA Associate Education Minister Jenny Salesa is... more

Recruitment

Historic pay equity settlement for education support workers

14 Aug 2018 Recruitment By RT HON JACINDA ARDERN
14 AUGUST 2018Historic pay equity settlement for education support workers RT HON JACINDA ARDERN HON CHRIS HIPKINS Prime Minister The... more

Historic pay equity settlement for education support workers

22 Aug 2018 Recruitment By RT HON JACINDA ARDERN
14 AUGUST 2018Historic pay equity settlement for education support workers RT HON JACINDA ARDERN HON CHRIS HIPKINS Prime Minister The... more