Sharechat Logo

NZ dollar extends slide after strong US data, US bond yields at 7-year high

Wednesday 16th May 2018

Text too small?

The New Zealand dollar fell to a new five-month low as upbeat US economic figures including retail sales and US Treasury bond yields at seven-year highs overshadowed the positive effects of rising dairy prices.

The kiwi dollar fell to 68.56 US cents as at 8am in Wellington from 68.92 cents late yesterday. The trade-weighted index slipped to 72.05 from 72.11.

The US dollar index rose to its highest level this year after figures showed an increase in retail sales while the yield on 10-year Treasuries climbed to 3.08 percent, the highest since mid-2011. While the Federal Reserve has signalled at least two more rate hikes this year, the Reserve Bank last week said rates are firmly anchored at a record low. Market direction out of the US overshadowed the results of the latest Global Dairy Trade auction overnight, which recorded the second straight gain in prices.

"The 0.69 level has now been and gone, as another (modest) lift in global dairy prices was overshadowed by solid US data and 10-year Treasury yields easily pushing up over 3 percent," said Sharon Zollner, chief economist at ANZ Bank New Zealand. "Domestic factors are certainly taking a backseat for now, meaning further moves south remain highly likely."

Zollner said the kiwi is trading near support levels of around 68.50 US cents and will encounter resistance if it rises back up to 70.50 cents.

Overnight, dairy product prices rose at the Global Dairy Trade auction, gaining for the second time in the most recent seven events amid better-than-expected gains for anhydrous milkfat and skim milk powder. The GDT price index rose 1.9 percent from the previous auction two weeks ago. Whole milk powder gained 0.2 percent to US$3,226 a tonne. 

The kiwi was little changed at 91.77 Australian cents. It traded at 57.90 euro cents from 57.95 cents yesterday and at 4.3752 yuan from 4.3742 yuan. It fell to 50.78 British pence from 50.89 pence and to 75.67 yen from 75.74 yen. 

(BusinessDesk)

  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 falls with Aussie after Westpac's RBA rate cut call
Intuit juggernaut grows QuickBooks subscribers but momentum slows
Reaction to Budget rules relaxation shows balance 'about right', says Ardern
Augusta lifts net profit six fold as investors flock into new funds
Annual exports to China top $15 billion for first time
Gentrack posts $8.7M loss on CA Plus write-down
Westpac says RBNZ capital proposals would add $6,000 p.a. to an Auckland mortgage
Cavalier says market conditions still challenging
Ryman hikes dividend as annual earnings grow on wider development margin
24th May 2019 Morning Report

IRG See IRG research reports