Kiwi falls after Wheeler talks down intervention, QE

BUSINESSDESK: The New Zealand dollar fell after Reserve Bank governor Graeme Wheeler talked down the prospects of intervening in currency markets and ruled out printing more money to stoke the local economic recovery.

The kiwi fell to 81.80 US cents at 5pm in Wellington from 82.16 cents at 8am and 82.21 cents yesterday. The trade-weighted index declined to 73.10 from 73.34 yesterday.

Mr Wheeler told a business audience in Auckland that quantitative easing is not needed in New Zealand and that there is more scope to cut rates if need be.

He also ruled out intervening in currency markets, saying such a move "is unlikely to have a sustainable effect on the New Zealand dollar". 

His first public speech as governor comes a day after his debut official cash rate review, where he kept the benchmark rate on hold at 2.5%.

"People are probably reading too much into it. December is going to be the big one when we get the forecasts" in from the quarterly monetary policy statement, says Chris Tennent-Brown, FX economist at Commonwealth Bank of Australia in Sydney.

"The kiwi has come off its lows earlier in the week," but is largely trading in a range of between 81 US cents and 83 cents.

Traders are awaiting the November 6 US presidential election, which will give traders some clue as to how the world's biggest economy will deal with massive Federal government budget cuts, colloquially known as the "fiscal cliff".

The kiwi fell to 50.74 British pence from 51.23 pence yesterday after the UK economy unexpectedly grew 1% in the third quarter on the strength of the Olympic Games. That is the fastest growth rate since 2007 and surprised economists who were picking the recession to endure.

The kiwi fell to 63.24 euro cents from 63.31 cents yesterday and dropped to 79.23 Australian cents from 79.32 cents. It fell to 65.46 yen from 65.69 yen yesterday.

This article is tagged with the following keywords. Find out more about My Tags

Comment & Question

Commenter icon key: Subscriber Verified

Post New comment or question

Plain text

  • No HTML tags allowed.
  • Web page addresses and e-mail addresses turn into links automatically.
  • Lines and paragraphs break automatically.

NZ Market Snapshot

Forex

Sym Price Change
USD 0.7850 0.0000 0.00%
AUD 0.8924 0.0000 0.00%
EUR 0.6196 0.0000 0.00%
GBP 0.4880 0.0000 0.00%
HKD 6.0917 0.0000 0.00%
JPY 84.8970 0.0000 0.00%

Commods

Commodity Price Change Time
Gold Index 1231.3 -0.710 2014-10-24T00:
Oil Brent 86.1 -0.510 2014-10-24T00:
Oil Nymex 81.0 -1.020 2014-10-24T00:
Silver Index 17.1 0.024 2014-10-24T00:

Indices

Symbol Open High Last %
NZX 50 5292.8 5344.4 5341.7 -0.15%
NASDAQ 4459.5 4486.3 4452.8 0.69%
DAX 9008.6 9044.9 9047.3 -0.66%
DJI 16677.0 16811.7 16677.9 0.76%
FTSE 6419.1 6419.1 6419.1 -0.47%
HKSE 23311.9 23352.6 23333.2 -0.13%
NI225 15354.4 15377.0 15139.0 1.01%