Sharechat Logo

NZ dollar gains as Fed minutes point to 3 hikes, European data weakens

Thursday 24th May 2018

Text too small?

The New Zealand dollar rose against the greenback and the euro after the Federal Reserve minutes pointed to no more than three rate hikes this year while European manufacturing and services data weakened.

The kiwi dollar advanced to 69.20 US cents as at 8am in Wellington from 69.09 cents late yesterday. The kiwi gained to 59.10 euro cents from 58.72 cents and the trade-weighted index rose to 72.62 from 72.48.

The Fed minutes showed most policymakers saw the need for another rate hike in the US "soon" but overall the tone was taken as slightly dovish. In Europe, figures showed the Markit services and manufacturing PMIs both fell in May, while consumer confidence came in lower than expected.

The "kiwi has had a late bounce on some perceived dovish comments in the FOMC minutes," said Liz Kendall, senior economist at ANZ Bank New Zealand. "In response, market pricing for interest rate hikes was little changed, with 92 percent chance of a 25 basis point rate hike next month. Beyond June, the outlook is less certain."

Markets remain jittery about global trade after US President Donald Trump tempered optimism over progress made so far in trade talks with China. The latest update on New Zealand trade is due for release this morning, with merchandise trade data for April expected to show a modest $198 million surplus in the month.

The New Zealand dollar fell to 91.46 Australian cents from 91.51 cents yesterday and rose to 4.4189 yuan from 4.4037 yuan. It decreased to 76.16 yen from 76.33 yen and rose to 51.81 British pence from 51.49 pence.


  General Finance Advertising    

Comments from our readers

No comments yet

Add your comment:
Your name:
Your email:
Not displayed to the public
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:

MARKET CLOSE: NZ shares rise on Fed restraint, local GDP growth; Auckland Airport slides
KiwiSaver manager Milford dumps $14m of Facebook shares, stops ads after terror attacks
NZ dollar subsides after early boost from Fed, GDP data
Patience needed for Fonterra's streamlining, says FNZC's Dekker
Agria, Lai fined $220,000 for good character breaches
Moderate GDP growth unlikely to worry RBNZ, economists say
NZ 4Q GDP rises 0.6%, driven by service industries
No trade wobbles in China for Fonterra
NZ dollar benefits from dovish Federal Reserve
First NZ's return to Jarden moniker part of bigger role in financial services

IRG See IRG research reports