Story image

NZ dollar heads for 0.3% weekly gain as RBNZ's Wheeler disappoints pessimists

13 Mar 2015

The New Zealand dollar is heading for a 0.3 percent weekly gain against the greenback after Reserve Bank governor Graeme Wheeler yesterday disappointed traders betting on a gloomy outlook for the local economy when he kept the key rate unchanged.

The kiwi rose to 73.77 US cents from 73.57 cents on Friday in New York last week. It traded at 73.62 cents at 8am, and was up from 72.98 cents yesterday. The trade-weighted index advanced to 77.87 from 77.38 yesterday, and little changed on the week.

A BusinessDesk survey of 11 currency strategists, traders and analysts predicted the kiwi would trade between 71.80 US cents and 75.50 cents this week. Eight expected the local currency to decline while one picked it to increase and two said it would probably remain unchanged.

Recent strength in the greenback has been tempered by softer than expected US retail sales yesterday in anticipation of next week's policy review by the Federal Reserve. That coincided with New Zealand's central bank yesterday keeping the official cash rate at 3.5 percent, and governor Graeme Wheeler saying he declined to follow the 20-plus other monetary authorities to cut rates because of strength in the local economy.

"The whole MPS (monetary policy statement) was not as dovish as expected, and all the speculative bets for the kiwi to fall were wrong, so they bought them back in a hurry," said Imre Speizer, senior markets strategist at Westpac Banking Corp. "That's what caused the very sharp one-and-a-half cent bounce yesterday, but today's just been sideways."

Speizer said next week's Federal Open Market Committee meeting is the major event traders are watching, and if the Fed drops its reference to being patient as to when it will raise interest rates, that will spur the greenback higher, and push the kiwi lower.

The New Zealand dollar edged down to 95.96 Australian cents from 96.10 cents yesterday, and gained to 4.6173 Chinese yuan from 4.5682 yuan. The local currency rose to 89.58 yen from 88.75 yen yesterday.

The kiwi was little changed at 69.49 euro cents from 69.50 cents yesterday, and gained to 49.60 British pence from 48.90 pence.

New Zealand's two-year swap rate slipped to 3.5375 at 5pm in Wellington from 3.55 yesterday, and the 10-year swap rate decreased to 3.8125 from 3.83.

Security flaw in Xiaomi electric scooters could have deadly consequences
An attacker could target a rider, and then cause the scooter to suddenly brake or accelerate.
Four ways the technology landscape will change in 2019
Until now, organisations have only spoken about innovative technologies somewhat theoretically. This has left people without a solid understanding of how they will ultimately manifest in our work and personal lives.
IDC: Top 10 trends for NZ’s digital transformation
The CDO title is declining, 40% of us will be working with bots, the Net Promoter Score will be key to success, and more.
Kiwi partner named in HubSpot’s global top five
Hype & Dexter is an Auckland-based agency that specialises in providing organisations with marketing automation solutions.
Moustache Republic expands Aussie presence with new exec
The Kiwi digital commerce partner has appointed a Sydney-based director to oversee the expansion of the company’s Australian footprint.
Epson’s new EcoTank range with two years printing per tank
With 11 new EcoTank printers that give an average user two years of printing and cost just $17.99/colour to refill, Epson is ready to change the game.
Te reo Māori goes global via language app called Drops
If you’re keen to learn a few words of Māori – or as much as 90% of the language, you may want to check out an Android and iOS app called Drops.
Reckon Group announces a steady profit in 2018
Reckon continued its investment in growth throughout the year with a development spend of $14.3 million.