Sharechat Logo

NZ dollar gains after cautiously upbeat Fed; Japan unleashes more stimulus

Thursday 28th July 2016

Text too small?

The New Zealand dollar rose after the Federal Reserve said near-term risks for the world's biggest economy were diminishing, keeping on track expectations for an interest rate hike this year.

The kiwi rose to 70.71 US cents as at 8am in Wellington, from 70.38 cents late yesterday. It gained to 74.36 yen from 74.16 yen following Japan's announcement of a stimulus package of more than 28 trillion yen (US$265 billion), bigger than expected and lifting expectations for easing by the bank of Japan on Friday.

The Fed left its target interest rate in a range of 0.25 percent to 0.5 percent as expected and said near-term risks to the US economic outlook had diminished and the labour market had improved, suggesting it will raise rates later this year. The Fed statement kept alive bets that the central bank could raise rates as soon as September, although a Reuters survey suggests it will wait until December.

"Overall, we’d say the Fed is buying time, and not trying to point the market toward an imminent hike, but our view of a hike by year-end seems on track," said Kymberly Martin, senior market strategist at Bank of New Zealand. After Japan’s Prime Minister Shinz┼Ź Abe unveiled his stimulus package "the market is now speculating whether this will be complemented by an announcement of further monetary stimulus from the Bank of Japan tomorrow."

The kiwi rose to 74.41 yen from 74.16 yen late yesterday.

It gained to 94.39 Australian cents from 93.98 cents after figures yesterday showed Australia's consumer prices remained weak in the second quarter, keeping alive expectations the Reserve Bank of Australia will cut the cash rate a quarter point to 1.5 percent next week. Australia's trimmed mean CPI rose 1.7 percent from a year ago compared to economist expectations of 1.5 percent. 

The kiwi fell to 4.7143 yuan from 4.6947 yuan and slipped to 53.49 British pence from 53.60 pence from 53.76 pence. It was little changed at 63.91  euro cents from 63.99 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:

MARKET CLOSE: Blue-chip stocks Meridian, A2 lead market lower
NZ dollar rises on Brexit hopes, rate cut reassessment
Three not failing, just needs a new owner - MediaWorks CEO
Major investors back new CBL class action targeting directors
Rip Curl purchase a done deal on Kathmandu proxies alone
Comvita chair Neil Craig eyes the exit once he finds a new CEO
Mercury raises guidance on increased storage, high spot prices
Eroad reports strong 3Q sales growth, eyes ASX listing
MediaWorks puts TV business on the block
NZ dollar benefits as preliminary Brexit deal improves risk appetite

IRG See IRG research reports