Sharechat Logo

NZ dollar falls as US data points to improving economic prospects

Thursday 19th January 2017

Text too small?

The New Zealand dollar fell from a month-high after US inflation and industrial figures showed the slow recovery in the world's biggest economy is on track, giving the Federal Reserve room to hike interest rates this year.

The kiwi declined to 71.64 US cents as at 8am in Wellington from 72.04 cents late yesterday. The trade-weighted index fell to 78.46 from 78.72.

The US consumer price index rose 0.3 percent last month, in line with market expectations, for an annual increase of 2.1 percent, the fastest in more than two years. Industrial production rose 0.8 percent in December versus expectations of a 0.6 percent gain. Traders are awaiting a speech by Federal Reserve chair Janet Yellen after San Francisco Fed president John Williams said there was a "good case" for three rate hikes this year while more may be needed if president-elect Donald Trump makes good on promises including tax cuts. By contrast, the Reserve Bank's official cash rate track shows little intention to raise rates in the next three years.

"USD strength was the overriding feature of the night’s trading," said Sharon Zollner, senior economist at ANZ Bank New Zealand. "With two days until Donald Trump is inaugurated as US

president, markets remain highly attuned to any hints of policy in the initial stages of the presidency."

Locally today, traders will get the latest reading on manufacturing with the release of the BusinessNZ manufacturing PMI, building consents for November and the ANZ Consumer Confidence Index for January.

The kiwi was unchanged from yesterday at 58.33 British pence. It fell to 95.01 Australian cents from 95.36 cents and declined to 67.15 euro cents from 67.32 cents. The local currency traded at 81.35 yen from 81.42 yen and fell to 4.8939 yuan from 4.9391 yuan.

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:

MARKET CLOSE: NZ shares fall as Meridian faces declining hydro storage
NZ dollar gains as rising consumer prices deflate chance of rate cut
Treasury Secretary to sit in on RBNZ monetary policy reviews
Cancer test firms Pacific Edge, TruScreen give market some cheer
Bridges denies Ross allegations, welcomes police inquiry
Second round of Overseas Investment Act review juggles competing tensions
Jami-Lee Ross accuses Bridges of corruption, resigns to trigger by-election
First NZ cuts Michael Hill earnings forecast after weak sales
Focus on 'low-hanging fruit' for emissions reduction - Methanex
NZ 3Q inflation higher than expected but driven by one-offs

IRG See IRG research reports