NZ dollar drops below US68c on plan to up bank capital
By Paul McBeth
Dec. 14 (BusinessDesk) - The New Zealand dollar fell below 68 US cents for the first time in two weeks after the Reserve
Bank outlined plans for lenders to hold greater capital reserves, which would likely boost borrowing costs and slow the
The kiwi dropped to 67.96 US cents as at 5pm in Wellington from 68.57 cents immediately before the release and 68.56
cents yesterday. The trade-weighted index was at 74.31 from 74.82 yesterday.
The local currency is heading for a 1 percent weekly decline against the greenback as the stiffer capital requirements
added to investor nervousness in thinly traded markets. 0
The Reserve Bank's move added to general unease among investors as Chinese data showed weaker retail sales than
expected, and on growing speculation that US President Donald Trump may face impeachment. Stocks across Asia fell, with
Hong Kong's Hang Seng down 1.4 percent in afternoon trading.
"That's been a bit of a negative for the kiwi," said Martin Rudings, senior dealer foreign exchange at OMF. "There's a
bit of stuff going on with Trump and that's affecting equity markets, creating a risk-off feeling across Asia."
Local data today showed New Zealand's housing market continued to cool in November, while a manufacturing survey
indicated an upbeat outlook after a mediocre period in the middle of the year.
New Zealand's two-year swap rate increased 1 basis point to 2.08 percent, and 10-year swaps were down 1 basis point at
The kiwi fell to 59.80 euro cents from 60.31 cents yesterday. The European Central Bank kept its key rate unchanged
overnight and confirmed plans to end its quantitative easing programme at the end of the month.
Meanwhile, British Prime Minister Theresa May is attempting to gain concessions from the European Union over the Brexit
deal, having seen off a leadership challenge. The kiwi dropped to 53.80 British pence from 54.34 pence yesterday.
The kiwi dropped to 94.45 Australian cents from 94.84 cents yesterday and declined to 4.6813 Chinese yuan from 4.7116
yuan. It fell to 77.12 yen from 77.77 yen yesterday.