Sharechat Logo

NZ dollar falls as weaker commodity prices weigh, inflation figures loom

Thursday 20th April 2017

Text too small?

The New Zealand dollar fell as weaker commodity prices sapped demand for currencies linked to primary production and ahead of local figures expected to show consumer prices rose at their fastest annual pace in more than five years. 

The kiwi dropped to 69.99 US cents as at 8am in Wellington from 70.44 cents yesterday. The trade-weighted index declined to 76.11 from 76.47 yesterday. 

The Thomson Reuters/CoreCommodity CRB index, a broad measure of prices for raw materials, fell 1.4 percent as weaker prices for oil and iron ore weighed on currencies sensitive to commodity prices including the kiwi, Australian and Canadian dollars. Investors will be watching first-quarter inflation figures which are expected to show the consumers price index rose at an annual pace of 2 percent, the fastest annual pace since September 2011, as more expensive food and energy brings the CPI back to the mid-point of the Reserve Bank's 1 percent-to-3 percent target range. 

"Commodity price moves and risk attitudes are likely to be the main driver of the NZD in the near term, with New Zealand’s solid growth story hardly new news," ANZ Bank New Zealand senior economist Sharon Zollner said in a note. "That said, this morning’s CPI could provide some fireworks if it misses expectations significantly on either side."

Reserve Bank governor Graeme Wheeler has said he's in no rush to move the official cash rate from its 1.75 percent level, while acknowledging heightened geopolitical risks could force his hand either way. The stand-off between the US and North Korea has been weighing on equity markets in recent weeks while the upcoming French election and UK's looming snap election have heightened that uncertainty, stoking demand for safe-haven assets such as gold and Japan's yen. The local currency dropped to 76.18 yen from 76.49 yen yesterday. 

The kiwi fell to 65.32 euro cents from 65.69 cents yesterday and declined to 54.75 British pence from 54.90 pence. The New Zealand dollar slipped to 93.30 Australian cents from 93.59 cents yesterday and fell to 4.8181 Chinese yuan from 4.8470 yuan. 

 

(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:

Yili's Westland takeover gets OIO approval
Govt eyes 2025 for farm-level emissions pricing, tests interim steps
Govt won't "die in a ditch" for 100% renewable target
NZ 2Q CPI +0.6% on quarter, +1.7% on year
16th July 2019 Morning Report
Suspect company faces liquidation after director dies
NZ dollar holds gains; focus on domestic inflation data
MARKET CLOSE: NZ shares slip as fears over slowing Chinese growth weigh; AMP slumps
NZ dollar rises after heartening Chinese data
Suspect company faces liquidation after director dies

IRG See IRG research reports