INDEPENDENT NEWS

NZ dollar holds above 70 US cts

Published: Wed 13 Jun 2018 08:26 PM
NZ dollar holds above 70 US cts as investors pick more aggressive Fed rate hikes
By Paul McBeth
June 13 (BusinessDesk) - The New Zealand dollar held above 70 US cents in local trading, having dipped on speculation the Federal Reserve may raise interest rates more aggressively than previously anticipated.
The kiwi traded at 70.11 US cents as at 5pm in Wellington from 70.03 cents at 8am and down from 70.37 cents yesterday. The trade-weighted index was at 73.62 from 73.72 yesterday.
The greenback got a boost from a Wall Street Journal report that Fed chair Jerome Powell plans to hold press conferences more frequently than the current quarterly briefings, which investors interpreted as making every meeting a live chance for a rate hike. The Fed ends its two-day policy meeting tomorrow morning NZ time, and is expected to raise the federal funds rate a quarter point to a range of 1.75 percent-to-2 percent. Investors also predict a steeper path for higher rates.
"A hike is as good as certain - the question will be what words and dots and other things they put around," said Imre Speizer, senior markets strategist at Westpac Banking Corp in Auckland. "Most of the market thinking like we like we are, that there's a decent risk of a hawkish narrative, and if you don't get one they might sell the (US) dollar off."
Local data today showed food prices fell in May on cheaper produce, while guest nights tapered off in April as public holidays fell outside that month.
Speizer said New Zealand's pace of inflation will probably pick up through the year as a weaker currency and more expensive oil drive up tradeable consumer prices, although the Reserve Bank's flat track for the official cash rate should remain intact even as other central banks start hiking rates.
New Zealand's two-year swap rate increased 1 basis point to 2.23 percent and 10-year swaps were unchanged at 3.19 percent.
The local currency traded at 59.70 euro cents from 59.81 cents yesterday ahead of the European Central Bank meeting later this week. Speizer said that review will be closely watched to see whether the ECB starts winding back its quantitative easing programme.
The kiwi fell to 52.47 British pence from 52.68 pence yesterday, and rose to 77.56 yen from 77.22 yen, with the Bank of Japan rounding out the major monetary authorities meeting this week.
The local currency gained to 92.62 Australian cents from 92.39 cents after a Westpac consumer confidence survey showed improved sentiment across the Tasman, and fell to 4.4903 Chinese yuan from 4.5079 yuan yesterday.
(BusinessDesk)
BusinessDesk
Independent, Trustworthy New Zealand Business News
The Wellington-based BusinessDesk team led by former Bloomberg Asian top editor Jonathan Underhill and Qantas Award-winning journalist and commentator Pattrick Smellie provides a daily news feed for a serious business audience.
Contact BusinessDesk
Email:

Next in Business, Science, and Tech

GDP growth eases slightly
By: Statistics New Zealand
NZ first-quarter current account turns to surplus
By: BusinessDesk
Fonterra satisfied with Beingmate's response to error
By: BusinessDesk
Foreign buyer ban gets smoother edges
By: BusinessDesk
Govt declines application to mine conservation land
By: New Zealand Government
NZ economic growth slows in first quarter
By: BusinessDesk
Govt’s head in sand as economic growth slows
By: New Zealand National Party
Fonterra denies food safety issue for Chinese partner
By: RNZ
Fonterra seeking more details over Beingmate licensing issue
By: BusinessDesk
Record imports push current account deficit to 9-year high
By: Statistics New Zealand
Dairy product prices slip for seventh time in nine auctions
By: BusinessDesk
Foreign buyer screening law reported back
By: New Zealand Government
Overseas Investment Amendment a dog of a Bill
By: New Zealand National Party
Speaker rules out foreign buyer amendment
By: ACT New Zealand
View as: DESKTOP | MOBILEWe're in BETA! Send Feedback © Scoop Media