Dollar falls after BOJ stokes credit, nerves start creeping back into markets

The New Zealand dollar after the Bank of Japan's moves to fuel credit growth and as weak US data and the threat of emerging markets keep traders nervous about risk-sensitive assets.

The kiwi traded at 82.98 US cents at 5pm in Wellington from 83.02 cents at 8am, down from 83.46 cents yesterday. The trade-weighted index declined to 77.83 from 78.26 yesterday.

The trans-Tasman currencies weakened against the yen after the Bank of Japan yesterday boosted its lending programmes to stoke credit growth, prompting Japanese investors to take profits in the two risk-sensitive currencies. The kiwi fell to 84.80 yen at 5pm in Wellington from 85.45 yen yesterday.

At the same time, unrest in Ukraine, Venezuela and Egypt has some traders mulling another downturn in emerging markets and stocks on Wall Street look close to ending its recent rally, which would see investors return to backing safe haven assets.

"In the next couple of days there could be a bit more uncertainty," said Tim Kelleher, head of institutional FX sales NZ at ASB Institutional in Auckland. "It all points to things being a little tentative, and there's a bit of profit taking going on" which has put pressure on the trans-Tasman currencies, he said.

Traders are awaiting tomorrow morning's release of the Federal Reserve's minutes from its last meeting and the latest HSBC China preliminary manufacturing PMI for February later that day.

Dairy prices at Fonterra Cooperative Group's online auction fell 1.2 percent to a trade-weighted US$5,016 per tonne, on the smallest volume sold since June last year.

New Zealand's fourth-quarter producers price index tomorrow is unlikely to attract much market attention.

The local currency traded at 92.1 Australian cents at 5pm in Wellington from 92.08 cents yesterday and slipped to 60.29 euro cents from 60.86 cents. It fell to 49.75 British pence from 49.88 pence yesterday.

(BusinessDesk)

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NZ Market Snapshot

Forex

Sym Price Change
USD 0.7262 -0.0068 -0.93%
AUD 0.9355 0.0074 0.80%
EUR 0.6426 -0.0068 -1.05%
GBP 0.4831 -0.0009 -0.19%
HKD 5.6293 -0.0529 -0.93%
JPY 85.9680 -0.1200 -0.14%

Commods

Commodity Price Change Time
Gold Index 1285.9 -7.880 2015-01-28T00:
Oil Brent 49.6 0.350 2015-01-28T00:
Oil Nymex 44.5 -1.680 2015-01-28T00:
Silver Index 18.1 0.004 2015-01-28T00:

Indices

Symbol Open High Last %
NZX 50 5794.8 5820.0 5794.8 -0.60%
NASDAQ 4635.7 4644.0 4638.0 -0.19%
DAX 10666.4 10743.6 10711.0 0.23%
DJI 17195.3 17264.0 17191.4 0.13%
FTSE 6825.9 6825.9 6825.9 -0.22%
HKSE 24645.2 24739.2 24861.8 -1.07%
NI225 17666.9 17778.8 17795.7 -1.06%