Sharechat Logo

NZ dollar slips below 70 US cents

Wednesday 24th May 2017

Text too small?

The New Zealand dollar dipped below 70 US cents as credit rating agency Moody's Investors Service downgraded China's rating on fears rising debt levels could stifle growth in the world's second-biggest economy, which is also New Zealand's and Australia's biggest trading partner.



The kiwi traded at 69.94 US cents at 5pm in Wellington, having touched a month-high 70.46 cents overnight, and down from 70.19 cents yesterday. The trade-weighted index was at 75.79 from 75.80. 



Moody's lowered China's long-term local currency rating one notch to A1 and downgraded the outlook to 'negative' from 'stable' on concerns the nation's financial strength would "erode somewhat over the coming years with the economy-wide debt continuing to rise as potential growth slows". That weighed more heavily on the Australian dollar than on the kiwi. The warning comes ahead of the release of minutes to the Federal Reserve's policy review from earlier this month, which may provide more clues on the timing and pace of future US interest rate hikes.



"The big news of today was that China downgrade", which "caused a little bit of volatility," said Michael Johnston, senior trader at HiFX in Auckland. "We suffered a little bit on the back of it but certainly, the Australian dollar suffered more." 



The kiwi rose to 93.92 Australian cents from 93.60 cents yesterday and fell to 4.8196 Chinese yuan from 4.8346 yuan. 



The local currency got a small boost from Fonterra Cooperative Group's increased forecast price paid to farmers for the 2017 and 2018 seasons, while trade data and tomorrow's government budget are also likely to show the domestic economy and Crown accounts are in good shape. Still, the prospect of rising US interest rates remains the over-arching theme for markets and Johnston expects to see the kiwi dollar around 65 US cents by the end of the year. 



New Zealand's two-year swap rate increased 1 basis point to 2.23 percent and 10-year swaps rose 3 basis points to 3.26 percent. 



The local currency increased to 78.22 yen from 78.01 yen yesterday and rose to 62.54 euro cents from 62.37 cents. The kiwi dipped to 53.89 British pence from 54.02 pence. 




  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:

Talisman Quarterly Activities Report to 30 June 2020
General Capital gives notice of Annual Meeting
Scales Corporation - Business Update
Fonterra Co-operative Group Global Dairy Update
Fonterra revises its 2019/20 and 2020/21 forecast Farmgate Milk Price ranges
Briscoe Group Limited Market update: 2nd Quarter Sales to 26 July 2020
thl market update - A frame work for 2021
Me Today - Outcome Of Share Purchase Plan Offer
Maxigesic IV® licensed in six new European nations
Evolve Shareholder Update

IRG See IRG research reports