Story image

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

13 Mar 15

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.

Report finds GCSB in compliance with NZ rights
The Inspector-General has given the GCSB its compliance tick of approval for the fourth year in a row.
Preparing for e-invoicing requirements
The New Zealand and Australian governments are working on a joint approach to create trans-Tasman standards to e-invoicing that’ll make it easier for businesses in both countries work with each other and across the globe
5c more per share: Trade Me bidding war heats up
Another bidder has entered the bidding arena as the potential sale of Trade Me kicks up a notch.
Hootsuite's five social trends marketers should take note of
These trends should keep marketers, customer experience leaders, social media professionals and executives awake at night.
Company-X celebrates ranking on Deloitte's Fast 500 Asia Pacific
Hamilton-based software firm Company-X has landed a spot on Deloitte Technology’s Fast 500 Asia Pacific 2018 ranking - for the second year in a row.
Entrepreneur reactivates business engagement in AU Super funds
10 million workers leave it up to employers to choose their Super fund for them – and the majority of employers are just as passive and unengaged at putting that fund to work.
Tether: The Kiwi startup fighting back against cold, damp homes
“Mould and mildew are the new asbestos. But unlike asbestos, detecting the presence – or conditions that encourage growth – of mould and mildew is nearly impossible."
Capitalising on exponential IT
"Exponential IT must be a way of life, not just an endpoint."