Sharechat Logo

NZ dollar mixed after CPI data

Thursday 20th January 2011

Text too small?

The New Zealand dollar eased slightly after consumer price index (CPI) data for the December quarter was released today.

The consumers price index rose 2.3% in the December quarter, influenced by the rise in goods and services tax on October 1, Statistics New Zealand (SNZ) said. For the year to the December quarter, the CPI rose 4%, the largest annual increase since the year to September 2008.

BNZ currency strategist Mike Jones said there was little reaction in the currency market immediately after the data was released but as the session progressed the NZ dollar moved slightly lower.

"A small fall in interest rate yields provided some headwind for the currency," he said.

The weakness was most noticeable in trading in the Australian cross rate.

The NZ dollar eased to be US76.56c in afternoon trading from US76.89c before the data was released. At 8am the NZ dollar had been at US77.23c from US77.41c at 5pm yesterday and it had climbed to around US77.85c early today.

Against the Australian dollar, the NZ dollar fell to A76.69c from A76.87c before the data was released. This compared with A77.13c at 5pm yesterday.

Mr Jones said the market consensus was for a 2.4% rise in the quarterly CPI and BNZ had been expecting a 2.5%.

"It is not a game changer for us. It doesn't change our view of when the next rate cut is going to be," Jones said.

Otherwise messages have been mixed in currency markets. Indications that solid Chinese demand was being maintained without rampant inflation had under-pinned growth sensitive currencies such as the NZ and Australian dollars in trading on Wednesday night.

But later global stock markets reversed course, indicative of a cooling in risk appetite, following a terrible profit announcement from investment banking and securities firm Goldman Sachs and a weak set of United States housing numbers.

The NZ dollar was at 0.5683 euro in afternoon trading from 0.5722 euro at 8am and 0.5755 at 5pm yesterday.

Reuters said the euro hit an eight-week high against the US dollar on growing hopes euro zone officials will navigate the sovereign debt crisis, with further gains seen if key levels are sustained.

The NZ dollar fell to 62.79 yen in afternoon trading from 63.70 at 5pm yesterday, while the trade weighted index fell to 68.43 from 69.20.



  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:

Scott Technology Limited (NZX: SCT) Announces FY21 Results
21st October 2021 Morning Report
Greenfern Industries Limited (NZX: GFI) L&Q Notice
TruScreen Group Limited (NZX: TRU) Clinical Trial Results Highlight Efficacy of TRU Technology
20th October 2021 Morning Report
Freightways Limited (NZX: FRE) Acquisition of ProducePronto
19th October 2021 Morning Report
PGG Wrightson Limited (NZX: PGW) Guidance Update
Vital Limited (NZX: VTL) Provides Update on PSN LMR
18th October 2021 Morning Report