NZ dollar falls with Aussie dollar after RBA decision

Published: Tue 3 Oct 2017 08:38 PM
NZ dollar falls with Aussie dollar after RBA keeps rates steady
By Rebecca Howard
Oct. 3 (BusinessDesk) - The New Zealand dollar fell against the greenback in tandem with the Australian dollar after the Reserve Bank of Australia kept rates steady and offered no hints any rate increases were on the horizon.
The kiwi was at 71.62 US cents as at 5:15pm from 71.96 cents yesterday. It was at 91.81 Australian cents from 91.96 Australian cents late yesterday.
Australia's central bank kept interest rates at 1.50 percent as expected and RBA Governor Philip Lowe reiterated "an appreciating exchange rate would be expected to result in a slower pick-up in economic activity and inflation than currently forecast." His commentary also highlighted risks around record household debt. "Retail sales have picked up recently, although slow growth in real wages and high levels of household debt are likely to constrain future growth in spending," said Lowe.
"The kiwi moved in line with the Aussie. The market has negatively interpreted the RBA," said Westpac Banking Corp senior strategist Imre Speizer.
Also weighing on the kiwi was business confidence data, which showed firms' optimism about the economy fell in the September quarter on pre-election jitters, although the fact that companies still expect better times ahead limited the impact, he said.
Speizer said the kiwi was also weighed by the stronger US dollar across Asia as investors continued to be cheered by recent positive US data, the latest attempt at getting US President Donald Trump's tax reforms on the table and news that former Federal Reserve governor Kevin Warsh, regarded as a hawk, is seen as a front-runner to replace Janet Yellen as Fed chair.
Looking ahead, he said investors will be watching for the overnight Global Dairy Trade auction with the futures pointing to a 6 percent lift in milk prices.
The kiwi was at 54.04 British pence from 53.81 pence late yesterday. It was at 61.17 euro cents from 61.09 cents. it traded at 81.01 yen from 81.19 yen yesterday and was at 4.7651 yuan from 4.7877 yuan. The trade-weighted index was at 75.82 from 76.00.
The two-year swap rate fell 1 basis point to 2.20 percent and 10-year swaps fell 1 basis points to 3.28 percent.

Next in Business, Science, and Tech

Maritime Union Says Deepening Supply Chain Crisis Requires Action
By: Maritime Union of New Zealand
Air New Zealand Employees Recognised With $1,000 Share Award
By: Air New Zealand
Bank Complaints On The Rise, Consumer NZ’s Survey Shows
By: Consumer NZ
Mercury Enters Into Binding Agreements To Acquire Trustpower’s Retail Business
By: Mercury
New Zealanders Missing Out On Hundreds Of Millions In KiwiSaver Government Contributions
By: ASB Bank
GDP Climbs 1.6 Percent In March 2021 Quarter Following December Dip
By: Statistics New Zealand
TECT Comment On Trustpower Retail Business Sale
View as: DESKTOP | MOBILE © Scoop Media