Sharechat Logo

NZ dollar hovers near 64 US cents as central bankers gather

Thursday 22nd August 2019

Text too small?

The New Zealand dollar is hovering near 64 US cents after minutes from the US Federal Reserve suggested the rate cut there last month wasn't the start of a strong easing cycle.

The kiwi was trading at 64.01 US cents at 7:50 am in Wellington from 64.07 US cents at 5pm and the trade-weighted index was at 71.24 from 71.28.

ANZ Bank economists Miles Workman and Michael Callaghan said markets had a “risk-on tone” ahead of the release of the FOMC minutes.

The greenback found more support when the minutes seemed to indicate the latest rate cut wasn’t the start of a full-on easing cycle.

"Most participants viewed a proposed quarter-point policy easing at this meeting as part of a recalibration of the stance of policy, or mid-cycle adjustment, in response to the evolution of the economic outlook over recent months," the minutes said. 

ANZ Bank noted “there was also discussion around wanting to avoid looking like they were on a path to more cuts. That said, two officials would have preferred to cut 50bps.”

The focus will now shift to the annual conference of central bankers held at Jackson Hole in Wyoming. Fed chair Jerome Powell is due to speak on Friday and his speech will be scrutinized for any clues about future rate cuts.

Markets see a 98 percent chance of another 25 basis point cut at the upcoming September meeting, according to the CME Group’s FedWatch tool.

US President Donald Trump, meanwhile, continued to pressure the Federal Reserve to cut rates further.  “The only problem we have is Jay Powell and the Fed. He’s like a golfer who can’t putt, has no touch. Big U.S. growth if he does the right thing, BIG CUT - but don’t count on him! So far he has called it wrong, and only let us down,” the US president tweeted. 

The kiwi was trading at 94.38 Australian cents from 94.51 cents at 5pm. Investors will be watching for Australian PMI data today for some insight into relative growth momentum, said ANZ Bank.

The kiwi was at 52.77 British pence from 52.71, at 57.72 euro cents from 57.75, at 68.23 yen from 68.19 and at 4.5206 Chinese yuan from 4.5186.  

(BusinessDesk)



  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:

Stocks Tumble, Havens Gain on Rising Virus Concern
25th February 2020 Morning Report
NZ dollar stalled amid ongoing coronavirus concern
Member growth delivers healthy results for nib New Zealand
The Australian Dollar Nears a Tipping Point Thanks to Ultra-Low Rates
With Gold Surging, Miners Face Payouts Versus Production Dilemma
24th February 2020 Morning Report
U.S. Dollar Nears a Critical Level That May Trigger a Buying Spree
21st February 2020 Morning Report
Tech Leads Stocks Lower on Virus Fears; Gold Gains

IRG See IRG research reports