Monday 18th April 2011 |
Text too small? |
After rising during the weekend to within a whisker of US80c, its highest level against the greenback in three years, the NZ dollar retreated today when Consumer Price Index (CPI) data was weaker than expected.
That left investors asking if a period of profit-taking will ensue or if the NZ dollar will push on through US80c and threaten its post-float high of US82.13c.
It was at US79.34c at 5pm, down from US79.99c on Saturday morning, and little changed from US79.44c at 5pm on Friday. It had drifted lower from US79.87c at 8am.
"We keep our positive week-ahead bias, and watch for a sustained move into the US80s as signalling an eventual test of the post-float high of US82.13c," Westpac said.
"Global risk sentiment remains strong, the US dollar remains unloved, and domestic fundamentals have surprised to the upside," Westpac said.
ANZ said the NZ dollar fell about 40 points when weaker than expected first quarter inflation data pushed wholesale interest rates six to seven points lower.
Statistics New Zealand reported an 0.8% rise in the CPI in the March quarter and a 4.5% rise for the year to March. The median forecasts in a Reuters survey had been for a 1% rise over the quarter and a 4.6% gain on the year.
"For now the path of policy tightening is likely to be considerably more gradual than past episodes, with a number of pauses along the way. However, if these medium-term inflationary pressures intensify, the Reserve Bank of New Zealand will have to move more forcibly from the accelerator to the brakes. This has typically been the norm with past tightening cycles," ANZ said.
The NZ dollar was at 0.5519 euro at 5pm from 0.5488 euro at the same time on Friday, having risen to an eight-week high of 0.5545 euro early on Saturday.
It was at A75.11c at 5pm from A75.43c at the same time on Friday and was at 65.70 yen from 66.28.
The trade weighted index was 68.82 from 68.90.
NZPA
No comments yet
SKC - APPOINTMENT OF CHIEF EXECUTIVE OFFICER
Devon Funds Morning Note - 17 April 2024
Consultation opens on a digital currency for New Zealand
TWL - TradeWindow's $2.2 million capital raise now unconditional
April 17th Morning Report
NZ Energy sector remains top 10 amid global disruption
SCT - 2024 Half Year Announcement
Fletcher Building Executive Team announcement
Meridian Energy monthly operating report for March 2024
April 16th Morning Report