INDEPENDENT NEWS

NZ dollar falls - Trump's Iran deal withdrawal

Published: Wed 9 May 2018 11:40 AM
NZ dollar falls as Trump's Iran deal withdrawal weighs on crude oil, commodities
By Jonathan Underhill
May 9 (BusinessDesk) - The New Zealand dollar fell to a new four-month low, joining a sell-off in commodity-linked currencies after US President Donald Trump said the US would pull out of an agreement over Iran's nuclear programme and reimpose sanctions on Tehran immediately.
The kiwi dollar dropped to 69.65 US cents as at 8am in Wellington from 70.13 US cents late yesterday. The trade-weighted index fell to 73.04 from 73.38.
Trump described the international agreement over Iran, which was signed off by former President Barack Obama, "a horrible one-sided deal that should have never, ever been made." Crude oil fell 0.7 percent and the CRB Index of 19 commonly traded commodities fell 0.8 percent. The Canadian and Australian dollars also fell. Traders in New Zealand are now focused on the Reserve Bank's monetary policy statement tomorrow, the first for new governor Adrian Orr, which is likely to maintain the view weak inflation means interest rates must stay low.
"Markets were focused on headlines surrounding the US-Iran nuclear deal and associated sanctions overnight," said Con Williams, rural economist at ANZ Bank New Zealand, in a note. The kiwi fell with "geopolitical risk on the rise. Expect NZD to trade with global risk sentiment – which is jittery – before Adrian Orr’s first RBNZ MPS tomorrow morning."
Weak inflation remains embedded in New Zealand company expectations, the Reserve Bank's survey of expectations showed. Firms see the consumers price index reaching 1.8 percent over the coming year, marginally lower than the 1.86 percent pace predicted in the March quarter. Two-year ahead inflation expectations also declined to 2.01 percent from 2.11 percent, the midpoint of the central bank's 1-to-3 percent target band.
Today, retail spending on electronic cards for April are expected to show no change in the month after a 1 percent gain in March.
The New Zealand dollar traded at 93.45 Australian cents from 93.49 cents late yesterday. The kiwi fell to 51.40 British pence from 51.75 pence and slipped to 58.73 euro cents from 58.85 cents. It fell to 4.4373 yuan from 4.4636 yuan and dropped to 76 yen from 76.47 yen.
(BusinessDesk)
ends
BusinessDesk
Independent, Trustworthy New Zealand Business News
The Wellington-based BusinessDesk team provides a daily news feed for a serious business audience.
Contact BusinessDesk
Email:

Next in Business, Science, and Tech

2018: New Zealand’s equal-2nd warmest year on record
By: NIWA
GDP growth dampens in the September quarter
By: Statistics New Zealand
Coalition Government delivers boost for low income workers
By: New Zealand Government
IKEA to open in New Zealand
By: IKEA
2018 another hot year in NZ - Expert Reaction
By: Science Media Centre
Science Deadline: another hot year, fibre's benefits, 1080
By: Science Media Centre
2018 was NZ's warmest year on record - climate scientist
By: RNZ
Honours recognise work that addresses climate change
By: New Zealand Government
NZ economic growth softer than expected in Sept quarter
By: BusinessDesk
NZ economy slows, growth per person stalls
By: New Zealand National Party
Economic slowdown must prompt change in direction
By: ACT New Zealand
Taxpayers’ Union responds to economic growth slowdown
By: New Zealand Taxpayers' Union
Government outlines planned hikes in minimum wage
By: BusinessDesk
Wage rise welcome for some, worry for others
By: New Zealand National Party
View as: DESKTOP | MOBILEWe're in BETA! Send Feedback © Scoop Media