Sharechat Logo

NZ little changed near month-low on RBNZ easing bias, flat dairy auction

Wednesday 20th July 2016

Text too small?

The New Zealand dollar was little changed near its lowest levels in almost a month on speculation the Reserve Bank will have a clear run at cutting interest rates after announcing plans for further mortgage lending restrictions.

The kiwi traded at 70.50 US cents as at 8am in Wellington, from 70.27 cents late yesterday when it tumbled following the Reserve Bank's announcement of further measures to cool the housing market. The trade-weighted index slipped to 75.65 from 75.74 yesterday.

The kiwi dropped yesterday and swap rates fell to record lows on the RBNZ's latest plan to prevent an overheated housing market becoming a financial stability risk. The bank is due to give an economic update tomorrow, which is expected to signal its disquiet with a currency that's well above its projections on a TWI basis, constraining import prices and making it harder to return inflation to within its target range. Traders are betting on a second cut to the official cash rate after one penciled in for August.

The RBNZ's proposed new loan-to-value restrictions "have added to the market’s conviction that further OCR cuts are coming in August and beyond," Con Williams, agri economist at ANZ Bank New Zealand, said in a note. "Dairy prices still range trading, which will place pressure on opening milk price forecasts from May."

Dairy product prices were mixed at the latest GlobalDairyTrade auction as a gain in whole milk powder offset a decline for most other products. The GDT price index slipped to US$2,336, down from US$2,345 at the previous auction two weeks ago. Whole milk powder rose 1.9 percent to US$2,079 a tonne.

The kiwi rose to 93.87 Australian cents from 93.35 cents yesterday as minutes of the Reserve Bank of Australia's latest meeting kept open the door to further rate cuts.

It slipped to 74.73 yen from 74.80 yen yesterday and dropped to 4.7166 Chinese yuan from 4.7488 yuan. It rose to 53.81 British pence from 53.57 pence yesterday and decreased to 63.96 euro cents from 64.08 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:

Gold Report 21st May 2019
NZ dollar falls after RBA governor flags potential rate cut
ASB reviews ownership of Aegis
Auckland Airport kicks off next phase of expansion
Cashed-up Plexure eyes acquisitions to accelerate growth as loss shrinks
Tower turns to 1H profit, lifts FY guidance
IRD should have doubled claim against Watson's Cullen Group - Professor
Investore FY profit falls 16% on smaller valuation gain, signals flat dividend for 2020
Synlait receives cease and desist letter regarding Pokeno plant
21st May 2019 Morning Report

IRG See IRG research reports