INDEPENDENT NEWS

NZ dollar falls as US data pushes up greenback

Published: Wed 16 Dec 2009 09:25 AM
NZ dollar falls as US data pushes greenback to two-month high
By Paul McBeth
Dec. 15 (BusinessWire) – The New Zealand dollar fell after the greenback climbed to a two-month high as America printed stronger data in its production sectors, while slow growth in Europe was pegged by a downturn in business sentiment.
The Dollar Index, a measure of the U.S. dollar against a basket of currencies, climbed 0.3% to 77, its highest level since Oct. 4, after American industrial production and the Producer Price Index recorded stronger gains than expected. The gain in the PPI adds to the growing mood that Federal Reserve Chairman Ben Bernanke will have to boost rates earlier than anticipated to prevent inflation running away on him. Germany’s Zew survey came in below expectations as investors remain fearful that Greece is teetering and may drag down the Euro-zone’s economic recovery.
“The U.S. dollar was supported by the PPI data – there’s some potential inflationary pressure and that’s caused people to revisit their expectations around monetary policy” in the U.S., said Philip Borkin, economist at ANZ National Bank. The kiwi didn’t fall as much as other currencies as the “Reserve Bank was more upbeat and raised the prospect of an earlier hike in rates.”
The kiwi dropped to 72 U.S. cents from 72.24 cents yesterday and was little changed at 65.15 on the trade-weighted index, or TWI, a measure of the currency against a basket of five trading partners, from 65.16. It climbed to 64.67 yen from 65.35 yen yesterday and edged up to 79.51 Australian cents from 79.46 cents. It was unchanged at 49.58 euro cents and slipped to 44.32 pence from 44.38 pence yesterday.
Borkin said the currency may trade between 71.60 U.S. cents and 72.50 cents today, and will take its cue from third quarter Australian gross domestic product data when it’s released this afternoon.
The markets pulled down their forecast for the so-called ‘lucky country’s’ growth to 0.4% in the three months ended Sept. 30 after it posted a weak export number in its balance of payments, he said.
The Federal Open Market Committee meets tomorrow to review monetary policy in the U.S. tomorrow, amid expectations the Fed will hint interest rates may rise sooner than it has previously indicated.
(BusinessWire)

Next in Business, Science, and Tech

General Practices Begin Issuing Clause 14 Notices In Relation To The NZNO Primary Practice Pay Equity Claim
By: Genpro
Global Screen Industry Unites For Streaming Platform Regulation And Intellectual Property Protections
By: SPADA
View as: DESKTOP | MOBILE © Scoop Media