Sharechat Logo

NZ dollar heads for 1.7 percent weekly gain as US stalemate ends, shut-down to delay Fed tapering

Friday 18th October 2013

Text too small?

The New Zealand dollar is heading for a 1.7 percent weekly gain after markets rallied on the end to the US political stalemate over approving the Federal budget, which caused a partial shutdown of services and will likely lead to a delay in winding back monetary stimulus in the world's biggest economy.

The kiwi rose to 84.56 US cents at 5pm in Wellington from 83.16 cents at the start of the week. It slipped from 85.25 cents at 8am, and was little changed from 84.24 cents yesterday. The trade-weighted index decreased to 77.99 from 78.15 yesterday, and is heading for a 1 percent weekly gain from 77.20 at the Monday open.

Economists estimate the end to the partial shutdown of US Federal government services probably sliced 0.5 of a percentage point from quarterly growth. That slower pace of growth will likely feed into a further delay to the Federal Reserve's planned tapering of its US$85 billion monthly asset purchases, pushing out the expected appreciation of the US dollar, which has been debased by the monetary stimulus.

"When (Fed chair Ben) Bernanke said no to tapering, the market pushed its expectation out to December, and after the shutdown that's now moved to March," said Imre Speizer, market strategist at Westpac Banking Corp in Auckland. "The kiwi's going to go up because risk is back on."

Chinese government figures today showed the world's second-biggest economy grew at a 7.8 percent annual pace in the July through September period, in line with expectations, and supporting currencies that export into China, such as New Zealand and Australia. The kiwi dollar fell to 87.85 Australian cents from 88.27 cents yesterday.

The local currency fell to 82.92 yen at 5pm in Wellington from 83.07 yen yesterday, and declined to 61.88 euro cents from 62.18 cents. It dropped to 52.36 British pence from 52.73 pence.

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:

SML - Synlait Milk Limited - Trading Halt of Securities
AIA - Auckland Airport announces board chair changes
AIA - Auckland Airport announces board chair changes
CEN - Tauhara commissioning progress update
FPH initiates voluntary limited recall
March 28th Morning Report
KFL Celebrates 20 Years of Excellence in Investment Mgmt.
SVR - Savor FY24 Earnings Guidance & Change in Banking Partner
NZK - NZ King Salmon Investments Limited FY24 Results
March 27th Morning Report