NZ dollar falls as economic growth misses estimates, fiscal cliff talks drag

Free audio stream, including stories that are padlocked on our site. Listen on any device, anywhere. Updated twice daily. The audio stream takes several seconds to start on Android devices.

Launch Radio player

The New Zealand dollar fell yesterday after figures showed the economy grew less than expected in the third quarter, while US policymakers appear bogged near the finish line on talks to avert US$600 billion of automatic tax hikes and spending cuts.

The kiwi fell to 83.26 US cents at 5pm in Wellington from 83.62 cents at 8.30am and 83.91 cents yesterday. The trade-weighted index fell to 74.47 from 74.75 yesterday.

New Zealand's gross domestic product grew 0.2 percent in the three months ended Sept. 30, half the 0.4 percent pace forecast in a Reuters survey and spurred only by a pick-up in construction activity. The local economy has been showing signs of weakness through the middle of the year, with unemployment rate rising to a 13-year high 7.3 percent, and the figure cemented the view that future growth is hanging on the Canterbury reconstruction effort.

The local data comes as investors continue to wait for US legislators to cast aside their partisan brinkmanship and reach a deal to avert the fiscal cliff, which will probably send the world's biggest economy back into recession. Talks between the Democrat White House and the Republican Speaker of the House of Representatives have deteriorated in the past 24 hours, according to a Bloomberg report.

"It's going to come down to what happens on the US side of the equation," says Chris Tennent-Brown, FX economist at Commonwealth Bank of Australia in Sydney. "For the New Zealand side of the equation it's all over now" and the kiwi might have "another nudge down to 83.20 US cents" in Northern Hemisphere trading."

The kiwi fell to 70.28 yen from 70.69 yen yesterday after the Bank of Japan expanded its asset purchase programme by 10 trillion yen to 101 trillion yen after voters in the world's third-biggest economy elected a new, more activist government last weekend.

The kiwi dollar fell to 63.10 euro cents from 63.31 cents and declined to 51.32 British pence from 51.57 pence yesterday. The New Zealand dollar was little changed at 79.71 Australian cents from 79.73 cents.

(BusinessDesk)


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

Comments & Questions

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 0.7567 0.0000 0.00%
AUD 0.9753 0.0000 0.00%
EUR 0.6945 0.0000 0.00%
GBP 0.5084 0.0000 0.00%
HKD 5.8650 0.0000 0.00%
JPY 90.0730 0.0000 0.00%

Commods

Commodity Price Change Time
Gold Index 1198.2 -6.000 2015-03-27T00:
Oil Brent 56.4 2.710 2015-03-27T00:
Oil Nymex 48.9 -2.560 2015-03-27T00:
Silver Index 17.1 -0.071 2015-03-27T00:

Indices

Symbol Open High Last %
NZX 50 5833.2 5854.2 5833.2 0.36%
NASDAQ 4863.7 4899.3 4863.4 0.57%
DAX 11920.2 11954.1 11843.7 0.21%
DJI 17673.6 17729.1 17678.2 0.19%
FTSE 6895.3 6910.6 6895.3 -0.58%
HKSE 24541.4 24549.9 24497.1 -0.04%
NI225 19374.7 19590.0 19471.1 -0.95%