Tuesday 8th August 2017
|Text too small?|
The New Zealand dollar fell on a trade-weighed index basis ahead of what is expected to be a dovish statement from the Reserve Bank on Thursday.
The TWI was at 77.43 at 5pm from 77.93 late yesterday in Wellington. It traded at 92.90 Australian cents from 93.20 cents late yesterday and at 73.53 US cents versus 73.99 US cents yesterday.
The central bank is widely expected to keep rates on hold at 1.75 percent at Thursday's rate review but is now expected to signal rates on hold for longer than prior forecasts. In May it said rates would be on hold until 2019 and it could now signal 2020, according to economists.
"I think people are realising the RBNZ will be a bit more dovish so the New Zealand dollar has been under a bit of pressure," said ANZ Bank New Zealand senior economist Phil Borkin. "We certainly think they are going to flatten the official cash rate profile and certainly not talk about rate hikes anytime soon and they might even be a bit more explicit in terms of a few nerves about the currency. But we don't expect them to come out with an explicit easing bias by any means."
Across the Tasman investors were cheered when the strong run shown by the Australian business sector continued in the July NAB business survey, with business conditions hitting their highest level since 2008. The data weighed on the kiwi and Borkin said it could ease further, in particular ahead of Thursday's monetary policy statement.
Borkin also said the kiwi may also be faltering against the crosses on some pre-election jitters after the shakeup in the Labour Party that saw Jacinda Ardern replace Andrew Little as leader of the opposition. "The market may be reacting to some election uncertainty," after being largely complacent, he said. "It's become more interesting but what we really need is another poll."
The kiwi declined to 56.37 British pence from 56.65 pence and was at 4.9250 yuan from 4.9740 yuan. It dipped 62.26 euro cents from 62.72 cents and fell to 81.33 yen from 81.90 yen.
New Zealand's two-year swap rate fell 1 basis point to 2016 percent while the 10-year swaps fell 5 basis point to 3.16 percent.
No comments yet
Gold price hits $2,000 for first time on Covid
TruScreen strengthens its market presence in central and eastern Europe
Refining NZ announces non-cash impairment
Ryman Healthcare COVID-19 update Victoria
Talisman Quarterly Activities Report to 30 June 2020
General Capital gives notice of Annual Meeting
Scales Corporation - Business Update
Fonterra Co-operative Group Global Dairy Update
Fonterra revises its 2019/20 and 2020/21 forecast Farmgate Milk Price ranges
Briscoe Group Limited Market update: 2nd Quarter Sales to 26 July 2020