Sharechat Logo

NZ dollar dips on US data; focus now on ECB

Thursday 12th September 2019

Text too small?

The New Zealand dollar dipped after US producer price's lifted in August but was largely treading water ahead of the European Central Bank rate decision due overnight. 

The kiwi was trading at 64.15 US cents at 7:50 am in Wellington from 64.30 cents at 5pm. The trade-weighted index was at 71.31 from 71.41.

The US Bureau of Labor Statistics reported that the PPI for final demand rose 0.1 percent in August and rose 1.8 percent in the 12 months through August. Economists polled by Reuters had expected a flat result in August and a 1.7 percent annual increase. 

However, the lift in the US dollar was capped by near-term rate expectations.

"Despite this inflation measure coming in stronger than expected, the Federal Reserve is still expected to cut interest rates next week – a decision the market has now fully priced in," said ANZ Bank FX/rates strategist Sandeep Parekh.  

Risk appetite - and the kiwi - was also supported by news that China is granting tariff exemptions for 16 types of American-made products as a sign of goodwill ahead of the next round of trade talks. The tariffs were slated to be imposed on Sept. 17 and the exemption is valid for a year. 

"All eyes will be on the ECB tonight as departing president Mario Draghi fronts his second to last meeting. The market is expecting a strong stimulatory package," said Parekh. Interest rates are expected to drop 10 to 20 basis points and quantitative easing worth 30 billion to 50 billion euros per month is expected, along with a tiered deposit rate and dovish forward guidance, he said. 

The kiwi was trading at 58.27 euro cents from 58.16. 

Domestically investors will be keeping an eye on the August food price index for any signs of inflation.

The kiwi was trading at 93.49 Australian cents from 93.51, at 52.01 British pence from 52.00, at 69.16 yen from 69.24 and at 4.5645 Chinese yuan from 4.5710.

(BusinessDesk)

NOTE: please be advised to read full articles from Business Desk Website, you will have to pay a subscription fee on their website.



  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:

NZ dollar consolidates weekly gain of more than a US cent
NZ dollar holds gains on improved dairy, bank capital outlook
MARKET CLOSE: NZ shares gain; banks rally on Reserve Bank capital decision
NZ dollar rises; bank capital rules less harsh than expected
RBNZ relaxes capital requirements, allows preference shares, extends phase-in
NZ dollar extends gain amid mixed US data, possible trade progress
MARKET CLOSE: NZ shares dip on eve of major regulatory decisions
NZ dollar sees off global headwinds, holds above 65 US cents
NZ dollar holds above 65 US cents; dairy auction prices mixed
Dairy index falls on weaker butter, milk fat demand

IRG See IRG research reports