NZ dollar heads for 2.4% weekly drop 29 May 2015
Related articles
- NZ consumers grow more upbeat, may resume spending Business
- Knowles quits as CEO of KiwiBank Business
- NZ migration bolstered by British invasion Migration
- NZ manufacturing activity reaches highest since 04 Business
- NZ dollar hits 22-month high vs euro Business
- OceanaGold finds new gold deposits at Fraser mine Business
- Transpower gets go-ahead for $170m SI upgrade Business
- NZ home sales creep up in March, still subdued Property
- NZ economy expands at fastest pace in two years Business
- New Zealand food prices fall in February Business
NZ dollar heads for 2.4% weekly drop as Fed eyes rate hikes, questions loom over local economy
By Paul McBeth
May 29 (BusinessDesk) - The New Zealand dollar
is heading for a 2.4 percent weekly drop against the
greenback as comments by Federal Reserve officials revive
expectations the world's biggest central bank will hike
interest rates this year, while investors grow wary about
the local outlook.
The kiwi sank to 71.32 US cents at 5pm in Wellington from 73.11 cents on Friday in New York last week. It traded at 71.74 cents at 8am and 72.42 cents yesterday. The trade-weighted index declined to 74.83 from 75.92 yesterday, and is heading for a 2 percent fall on the week.
A BusinessDesk survey of 13 currency advisers
predicted the kiwi would trade between 70.60 US cents and 75
cents this week, with 11 expecting it to fall and two
betting it would gain.
Fed chair Janet Yellen last week said she expected interest rates would start rising this year, prompting investors to focus more closely on US economic data so as to second-guess when the Fed will start lifting the federal funds rate from a range of between zero and 0.25 percent. That was reinforced by stronger economic data earlier this week, and the second estimate of first-quarter gross domestic product will be watched for more signs of life in the world's biggest economy.
"The kiwi really took a bit of a shellacking in the last week or so," said Michael Johnston, senior trader at HiFX in Auckland. "It's more to do with the US dollar waxing and waning."
At the same time, New Zealand's economy is
coming under greater scrutiny after Fonterra Cooperative
Group trimmed its forecast payout to its farmer shareholders
for the current season, while predicting a payout of $5.25
per kilogram of milk solids. The world's biggest dairy
exporter anticipates a slow return by Chinese buyers, while
easy growing conditions have meant global supply remains
high. A weak business confidence survey today added to the
downward pressure on the local currency.
Johnston said he expects the kiwi will fall below 70 US cents in the coming months as the Fed gets closer to hiking interest rates, and markets revert to a greater semblance of normality.
Traders are pricing in a 54 percent chance the Reserve Bank will cut interest rates at next month's monetary policy review, with recent policy steps from both the central bank and government to rein in Auckland's property market seen as providing governor Graeme Wheeler headroom to provide looser policy.
New Zealand's two-year swap rate fell to 3.33 percent at 5pm in Wellington from 3.38 percent yesterday, and the 10-year swap rate dropped to 3.87 percent from 3.94 percent.
Johnston said negotiations between Greek policymakers and European Union and International Monetary Fund officials on nutting out a repayment deal will loom over the kiwi dollar next week, and if Greece ultimately defaults, a slump in the euro would drag the kiwi lower.
New Zealand's currency dropped to 65.17 euro cents at 5pm in Wellington from 66.31 cents yesterday, and fell to 46.55 British pence from 47.14 pence.
Australia's Reserve Bank reviews the target cash rate on Tuesday next week, and traders are pricing in a 5 percent chance of a rate cut. The kiwi fell to 93.17 Australian cents at 5pm in Wellington from 94.16 cents yesterday, and it dropped to 4.4242 Chinese yuan from 4.486 yuan.
The local currency declined to 88.32 yen from 89.80 yen yesterday.
(BusinessDesk)
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
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
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
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
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
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
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
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
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
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
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
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
14 AUGUST 2018Historic pay equity settlement for education support workers
RT HON JACINDA ARDERN
HON CHRIS HIPKINS
Prime Minister
The... more