NZ dollar rises ahead of CPI
The New Zealand dollar gains before figures expected to show inflation is tame enough to rule out any immediate increase in interest rates and as traders digested weaker US retail sales and a cut to forecast global growth by the International Monetary Fund.
The kiwi dollar slipped to 79.69 US cents from 79.51 cents at 5 pm in Wellington yesterday. The trade-weighted index was little changed at 72.31.
Inflation was 0.5 percent in the second quarter, unchanged from the first-quarter pace, for an annual rate of 1.1 percent, according to a Reuters survey. Some economists are predicting the consumers price index will drop below the central bank's 1 percent-to-3 percent annual rate in the third quarter.
Meantime, US retail sales fell 0.5 percent in June, the third monthly drop, and the IMF cut its global growth forecast for next year to 3.9percent from 4.1 percent. Growth in 2012 was kept at 3.5 percent.
"Sentiment towards the USD is the key driver of NZD/USD at present," said Mike Jones, currency strategist at Bank of New Zealand. "However, today's CPI figures could spur some near-term volatility."
The market is also awaiting testimony by Federal Reserve chairman Ben Bernanke, though the prospect of an extension to monetary easing is deemed unlikely.
"We'll likely get a firmer guide on USD direction from Fed chairman Bernanke tonight," Jones said.
Shares in the US fell as weaker US retail sales signalled the world's biggest economy is struggling to pick up pace. The Dow Jones Industrial Average was down 0.4 percent.
The New Zealand dollar edged up to 77.75 Australian cents from 77.74 cents yesterday ahead of the release of the Reserve Bank of Australia's board meeting minutes.
The kiwi slipped to 50.98 British pence from 51.07 pence and fell to 64.93 euro cents from 64.96 cents. The local dollar slipped to 62.80 yen from 62.89 yen.
Comments from our readers
No comments yet
Add your comment:
NZ dollar gains before CPI, helped by dairy gains, rally on Wall Street
NZ dollar trades little changed as US budget talks bear down on deadline
NZ dollar falls with equities on view US to sail over fiscal cliff
NZ dollar weakens as fiscal cliff looms, long bets unwind
NZ dollar sinks to three-week low as equities fall, fiscal talks in focus
NZ dollar slips as fiscal cliff talks grind slower in Washington
NZ dollar falls ahead of GDP report as global risk sentiment wanes
NZ dollar drops vs. euro after Greek upgrade, Spanish debt sale
NZ dollar holds above 80 Australian cents as RBA, half-year update loom
NZ dollar surges to 4-year high vs. yen as Japan’s LDP sweeps to victory