Sharechat Logo

NZ dollar little changed as hopes grow for clear signal on US rates from Yellen

Friday 26th August 2016

Text too small?

The New Zealand dollar was little changed, holding above 73 US cents as traders debate whether Federal Reserve chair Janet Yellen will give a clear signal on the timing and pace of US interest rate hikes when she addresses fellow central bankers at Jackson Hole.

The kiwi traded at 73.10 US cents as at 5pm in Wellington, from 73.16 cents late yesterday. The trade-weighted index slipped to 77.40 from 77.50.

With little domestic economic data of note, all eyes have been on the Jackson Hole symposium of central bankers amid questions about whether Yellen will echo the comments of other Fed officials in suggesting the central bank is close to a rate hike. That would provide some relief for Reserve Bank governor Graeme Wheeler who defended current monetary policy this week in the face of stubbornly low inflation and a high kiwi dollar, while reiterating that another cut to the official cash rate is likely.

"The market is waiting on tenterhooks for Janet Yellen and really hoping we're going to see some firm indications on when they are going to raise rates," said Michael Johnston, senior trader at HiFX. "I think she'll be saying it is looking like they will raise rates in the not too distant future but won't tie her hands further than that."

While the market still sees the prospects of a rate hike by the Fed in December, "this time last year the market was expecting to see three or four rate hikes in 2016 and we've yet to see one," he said.

The kiwi fell to 95.77 Australian cents from 95.92 cents and rose to 4.8695 yuan from 4.8665 yuan. It declined to 64.74 euro cents from 64.91 cents and was little changed at 55.34 British pence from 55.29 pence. The kiwi slipped to 73.44 yen from 73.50 yen.

New Zealand's two-year swap rate fell 2 basis points to 1.93 percent and 10-year swaps declined 3 basis points to 2.36 percent.

  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:

Broader review powers eyed for Climate Change Commission
MARKET CLOSE: NZ shares edge lower as global ructions weigh; Tourism Holdings sinks
NZ dollar rises as markets bet on US interest rate cut
Fonterra seeks further changes to dairy act
Tilt, Oji say transmission changes may discourage new generation
Tourism Holdings shares fall to 6-week low as US margins shrink
Venture capitalists split on govt picking winners
21st October 2019 Morning Report
Kiwi dollar steady as markets await Brexit developments
Domestic AGMs, multi-national earnings to provide economic insights

IRG See IRG research reports