Sharechat Logo

NZ dollar drops below US68c on plan to up bank capital

Friday 14th December 2018

Text too small?

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 economy. 

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 2.76 percent. 

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. 

(BusinessDesk)



  General Finance Advertising    

Comments from our readers

No comments yet

Add your comment:
Your name:
Your email:
Not displayed to the public
Comment:
Comments to Sharechat go through an approval process. Comments which are defamatory, abusive or in some way deemed inappropriate will not be approved. It is allowable to use some form of non-de-plume for your name, however we recommend real email addresses are used. Comments from free email addresses such as Gmail, Yahoo, Hotmail, etc may not be approved.

Related News:

SML - Synlait Milk Limited - Trading Halt of Securities
AIA - Auckland Airport announces board chair changes
AIA - Auckland Airport announces board chair changes
CEN - Tauhara commissioning progress update
FPH initiates voluntary limited recall
March 28th Morning Report
KFL Celebrates 20 Years of Excellence in Investment Mgmt.
SVR - Savor FY24 Earnings Guidance & Change in Banking Partner
NZK - NZ King Salmon Investments Limited FY24 Results
March 27th Morning Report