Sharechat Logo

NZ dollar falls as Kudlow talks up greenback, commodity prices slide

Friday 16th March 2018

Text too small?

The New Zealand dollar declined after comments from US President Donald Trump's new economic adviser Larry Kudlow that he favoured a stronger greenback and as commodity prices fell.

The kiwi dollar dropped to 72.69 US cents as at 8am in Wellington from 73.27 cents late yesterday. The trade-weighted index fell to 74.63 from 74.95.

Kudlow, named to the White House advisory role in a tweet from Trump yesterday told CNBC he would like to see the US dollar "a wee bit stronger" and that he would "buy King dollar" and sell gold. The CRB Index of 19 commonly traded commodities fell about 0.3 percent overnight, weighing on so-called commodity currencies including the kiwi and the Australian dollar. The kiwi initially fell yesterday after weaker-than-expected economic growth figures.

"The USD was boosted by comments from new economic adviser Kudlow that he would ‘buy USD and sell gold’," said Con Williams, rural economist at ANZ Bank New Zealand, in a note. "Expect downward pressure to be maintained as interest rate differentials come into focus next week (hiking US Fed and on-hold RBNZ) and there is some downward pressure on dairy returns (Fonterra half-year results and dairy auction)."

The Federal Open Market Committee holds its two-day meeting next week, where it will decide whether to maintain its guidance for three interest rate hikes this year and is expected to kick off with an initial quarter-point increase. Also next week is the Reserve Bank's interest rate review, the last for acting governor Grant Spencer, and expected to see the bank maintain its view that rates will rise gradually in coming years.

Meanwhile, Fonterra Cooperative Group releases its results and may update its milk payout forecast, while the latest dairy product auction is scheduled on the GlobalDairyTrade platform.

Today traders will be watching for the Business NZ-BNZ manufacturing PMI for February for another indicator of the domestic economy's strength.

The kiwi fell about a quarter of a US cent early yesterday on news that the economy expanded 0.6 percent in the three months to Dec. 31 versus an expected 0.8 percent as unfavourable weather weighed on agricultural output. 

The kiwi gained to 93.19 Australian cents from 93.01 cents. It fell to 77.21 yen from 77.68 yen and dropped to 59.08 euro cents from 59.20 cents. It fell to 52.16 British pence from 52.39 pence and declined to 4.5935 yuan from 4.6237 yuan.


  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:

PFI doubles 2018 profit on valuation gains, underlying earnings fall short
Steel & Tube turnaround continues with 49% jump in first-half net profit
February 18th Morning Report
FIRST CUT: Port of Tauranga lifts 1H profit 4%
NZ dollar starts the week with a tailwind as positive US-China trade talks boost sentiment
Tax Working Group's capital gains proposal keenly awaited
MARKET CLOSE: NZ shares dip as global trade jitters weigh on A2, F&P
NZ dollar set for weekly gain after Reserve Bank surprise
Burger Fuel exploring sale after review questions listing merits
New net migration data to remain rubbery for quite some time

IRG See IRG research reports