Sharechat Logo

NZ dollar mixed, buffeted by Fed talk and downunder data

Thursday 19th September 2019

Text too small?

The New Zealand dollar was mixed after a roller-coaster day of US central bank action and domestic and Australian data.

The kiwi was trading weaker at 63.08 US cents at 5pm in Wellington from 63.22 cents at 7:50am. But the trade-weighted index was slightly stronger at 70.23 from 70.21, mainly because the kiwi rose to 92.94 Australian cents from 92.45 cents.

The US central bank cut the Fed Funds rate by 25 basis points, as expected, but the market reacted more to chair Jerome Powell's commentary and the fact that only seven out of 17 policymakers favour a further cut this year.

With the US dollar jumping in reaction, the kiwi fell from 63.45 US cents to as low as 62.98 cents but had recovered to 63.13 cents just before stronger-than-expected domestic GDP data for the June quarter was released.

The kiwi then shot as high as 63.31 cents before gradually running out of puff as markets digested the fact that the data still showed annual growth slowing to 2.1 percent, a six-year low.

The New Zealand dollar fell as low as 62.96 US cents, only to revive again after Australian employment data for August came out.

That showed the unemployment rate ticking up to 5.3 percent from 5.2 percent in July. While 34,700 jobs were created, well over twice as many as the 15,000 expected, that reflected growth in part-time jobs as full-time jobs fell 15,500.

"We've had the Fed and some pretty chunky data but the moves weren't that significant," says Mike Shirley, a dealer at Kiwibank.

Once the dust settled after the GDP data, "the market decided, yes, 2.1 percent is better than expected, but it's still not very good," Shirley says.

"Aussie employment data is always a mixed bag, but the over-arching theme today was negative."

The market is now looking ahead to what Bank of England governor Mark Carney has to say about that central bank's latest thoughts on monetary policy.

"The sage words of Mark Carney are going to get the fine toothcomb treatment," Shirley said, given all the economic uncertainties being exacerbated by Brexit ructions.

The New Zealand dollar was unchanged at 50.54 British pence, at 57.12 euro cents from 57.25, at 68.06 yen from 68.51 and at 4.4805 Chinese yuan from 4.4784.

The two-year swap rate eased to a bid price of 0.9586 percent from 0.9825 yesterday while 10-year swaps fell to 1.2525 percent from 1.3250.

(BusinessDesk)

NOTE: please be advised to read full articles from Business Desk Website, you will have to pay a subscription fee on their website.



  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:

NZ dollar consolidates weekly gain of more than a US cent
NZ dollar holds gains on improved dairy, bank capital outlook
MARKET CLOSE: NZ shares gain; banks rally on Reserve Bank capital decision
NZ dollar rises; bank capital rules less harsh than expected
RBNZ relaxes capital requirements, allows preference shares, extends phase-in
NZ dollar extends gain amid mixed US data, possible trade progress
MARKET CLOSE: NZ shares dip on eve of major regulatory decisions
NZ dollar sees off global headwinds, holds above 65 US cents
NZ dollar holds above 65 US cents; dairy auction prices mixed
Dairy index falls on weaker butter, milk fat demand

IRG See IRG research reports