NZ dollar falls as Fed's Dudley points to 2015 rate hike, stocks fall, risk aversion rises
By Jonathan Underhill
Sept. 29 (BusinessDesk) - The New Zealand dollar fell after New York Federal Reserve president William Dudley said he
expects US interest rates to be raised this year, although on a low trajectory, while a drop in global stock markets
sapped risk appetite and demand for growth-linked currencies such as the kiwi.
The local dollar fell to 63.32 US cents as at 8:30am in Wellington, from 63.99 cents late yesterday. The trade-weighted
index fell to 69.18 from 69.79.
Equity markets in Europe and the US fell, and commodities dropped amid concern growth in China may be slowing, after
figures yesterday showed weaker Chinese industrial profits. The Fed's Dudley - one of nine US central bank officials
talking this week - said he expects the US economy will continue at its current pace, meaning "we probably will raise
interest rates later this year".
"The US dollar slipped against both the euro and the yen amid broad-based risk aversion but forged ahead against the
likes of Australian dollar, New Zealand dollar and emerging markets currencies," strategists at Westpac Banking Corp
said in a note.
Helping lift speculation that the US economy is continuing to expand apace, US personal spending data rose in August,
suggesting consumption will continue to underpin growth, although pending home sales fell a greater-than-expected 1.4
percent.
The local currency fell to 75.87 yen from 77.02 yen as risk aversion drove some investors to the relative safety of the
Japanese currency, while the kiwi dropped to 4.0281 yuan from 4.0769 Chinese yuan. The New Zealand dollar fell to 56.33
euro cents from 57.18 euro cents and declined to 41.69 British pence from 42.09 pence. The kiwi declined to 90.47
Australian cents from 91 cents yesterday.
(BusinessDesk)