NZ dollar jumps to 3-month high after weak data weighs on US interest rate outlook

Thursday 15th October 2015

The New Zealand dollar rose to its highest in more than three months after disappointing US retail sales and producer prices data pushed out expectations for when the Federal Reserve will likely raise interest rates.

The kiwi hit 68.14 US cents, its highest level since June 30, and was trading at 67.85 cents at 8am in Wellington, from 66.77 cents at 5pm yesterday. The trade-weighted index advanced to 72.49 from 71.64 yesterday.

The US dollar index, which measures the greenback against a basket of currencies, fell to a seven-week low after reports for September showed US retail sales rose by just 0.1 percent and producer prices fell by 1.1 percent, the biggest decline in eight months. The weak data increased speculation the Fed may hold off from raising interest rates this year.

"The US dollar weakened against all of its peers overnight," Bank of New Zealand senior market strategist Kymberly Martin said in a note. "The market has further reduced its expectation of a Fed hike by year-end."

In New Zealand today, traders will be eyeing the BNZ-BusinessNZ performance of manufacturing index and the ANZ-Roy Morgan consumer confidence index for a gauge on how the economy is tracking.

The New Zealand dollar advanced to 93.06 Australian cents from 92.26 cents yesterday ahead of Australian employment data for September scheduled for release today.

The local currency gained to 59.03 euro cents from 58.62 cents yesterday, increased to 43.82 British pence from 43.67 pence, rose to 80.60 yen from 79.90 yen and advanced to 4.3059 yuan from 4.2378 yuan.

BusinessDesk.co.nz

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