Sharechat Logo

NZ dollar little changed with US holiday, may fall on weaker dairy prices, Fed rate plans

Tuesday 21st February 2017

Text too small?

The New Zealand dollar was little changed, getting little overnight impetus with the US on holiday, and may decline if dairy prices fall at tonight's auction and expectations firm for interest rate hikes by the Federal Reserve.

The kiwi traded at 71.82 US cents as at 8am in Wellington from 71.75 cents late yesterday. The trade-weighted index was at 78.22 from 78.15.

Fed chair Janet Yellen has indicated a rate hike could come as soon as next month and the market is awaiting the minutes of the last Federal Open Market Committee this week for further detail of policymakers' thinking. In New Zealand, Finance Minister Steven Joyce is scheduled to talk at lunchtime in Wellington and the GlobalDairyTrade auction overnight may deliver a 3 percent decline for whole milk powder, based on the NZX dairy futures.

"The Fed’s tightening cycle plus US fiscal expansion should maintain upside pressure on US interest rates and the US dollar, pushing NZD/USD down to 0.7000 or lower," said Imre Speizer, senior market strategist at Westpac Banking Corp, in a note. "Granted, the NZ economy is strong and dairy prices have risen, but these forces are subservient to the US dollar’s trend."

The Reserve Bank has kept its official cash rate at a record low 1.75 percent and didn't signal any rate increases until mid-2019. Economists are expecting the central bank to lift rates at some point in 2018. The New Zealand dollar has traded in a range of 71.32 US cents to 72.42 cents in the past two weeks.

The local dollar slipped to 57.64 British pence from 57.78 pence yesterday. The kiwi traded at 67.67 euro cents from 67.61 cents, was at 81.27 yen versus 81.16 yen and at 4.9383 yuan from 4.9264 yuan. It was at 93.47 Australian cents from 93.48 cents.

  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:

NZ dollar stalled amid uncertainty about US rate cuts
RBNZ a 'poor communicator' - CBL's Harris
Methane reduction target could be catastrophic - Fonterra Shareholders' Council
Greater role for gas in electrification of transport, industry
Chorus sees growth in high value gigabit fibre plans
Arvida gets 87% uptake in $92 mln rights offer
NZ dollar weakens after US retail sales boost greenback
17th July 2019 Morning Report
Dairy product prices gain for first time in five auctions
MARKET CLOSE: NZ shares fall in listless trading; power companies gain

IRG See IRG research reports