Sharechat Logo

NZ dollar declines on US dollar strength after upbeat FOMC minutes

Thursday 21st August 2014

Text too small?

The New Zealand dollar declined as the US dollar strengthened after minutes to the Federal Reserve's last meeting were more upbeat than expected about the world's largest economy.

The kiwi fell to 83.67 US cents at 8am in Wellington, from 83.88 cents at 5pm yesterday. The trade-weighted index edged lower to  78.91 from 78.93 yesterday.

The US dollar index, which measures the greenback against a basket of currencies, rose to its highest in almost a year after minutes from the Federal Reserve Open Market Committee showed policymakers were less concerned about low inflation and more optimistic about a pickup in the labour market, suggesting they may hasten the removal of monetary policy stimulus. Fed officials have previously indicated interest rates would increase some time next year, after holding the rate near zero since December 2008.

"Kiwi is lower as are all major currencies against the US dollar," said Imre Speizer, senior market strategist at Westpac Banking Corp. in New Zealand. "The FOMC minutes were a bit more hawkish than expected, they saw an improving labour market and improving economic growth and expected it to continue going forward so US interest rates rose, the US dollar rose, and everything fell against it."

The New Zealand dollar will probably be capped at 84.15 US cents and continue to fall in the coming days towards 82 cents, Speizer said.

Today, traders will be eyeing New Zealand migration data for July as strong net migration is one of the factors cited by the Reserve Bank in raising interest rates. The latest ANZ-Roy Morgan consumer confidence report is also scheduled for release today, along with credit card billings for July.

The HSBC China Manufacturing PMI for August will also be watched for signs of how Asia's largest economy is tracking.

Fed Chair Janet Yellen is scheduled to speak on labour markets tomorrow at the annual economic symposium at Jackson Hole, Wyoming.

The New Zealand dollar slipped to 90.09 Australian cents from 90.28 cents yesterday, edged lower to 50.44 British pence from 50.51 pence, advanced to 63.11 euro cents from 63.03 cents and gained to 86.86 yen from 86.50 yen.

 

 

BusinessDesk.co.nz



  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:

Steel & Tube Fy20 Trading Update
Further Contract Win Strengthens Scott Technology’s Position In Mining Sector
China’s Assertiveness Is Becoming a Problem for Its Friends, Too
New Talisman - Chairman’s Address to AGM 2020 August 6, 2020
T&G reports its 2020 Interim Results
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

IRG See IRG research reports