NZ dollar little changed below 69 US cents as US CPI adds to Fed hike case
By Jonathan Underhill
Nov. 16 (BusinessDesk) - The New Zealand dollar was little changed, holding below 69 US cents, after US inflation
figures came in near expectations, keeping intact bets that the Federal Reserve will hike US interest rates next month.
The kiwi dollar traded at 68.75 US cents as at 8am in Wellington, having climbed as high as 69.18 cents overnight, from
68.71 cents late yesterday. The trade-weighted index was at 72.87 from 72.90 yesterday.
US Labor Department figures showed the consumer price index rose 0.1 percent last month, matching economists forecasts,
while core inflation was 1.8 percent year-on-year, beating estimates of a 1.7 percent rate. Other US figures showed
retail sales rose 0.2 percent in October against expectations of no change. Signs of strengthening inflation have helped
confirm expectations that the Fed will hike rates for the third time this year in its final meeting for 2017, while the
Reserve Bank has no plans to raise rates in the near term.
"With the data broadly in line with expectations, and the details showing tentative signs that some of the factors that
had weighed on inflation earlier in the year are abating, it seems fair to believe that a (Fed) hike now looks locked
and loaded," said Philip Borkin, senior economist at ANZ Bank New Zealand. "The October CPI figures were viewed by many
as one of the most important final hurdles for whether the Fed would hike again at its final meeting of the year next
month."
The ANZ consumer confidence survey for November will be closely watched today for any signs sentiment is changing in the
wake of the new government.
The kiwi was trading at 90.63 Australian cents from 90.56 cents late yesterday after the local currency gained on the
cross rate on Australian figures showing wage inflation was weaker than expected.
The kiwi fell to 52.18 British pence from 52.28 pence and traded at 58.24 euro cents from 58.26 cents. It was at 4.5513
yuan from 4.5556 yuan and traded at 77.61 yen from 77.72 yen.
(BusinessDesk)
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