NZ dollar little changed as risk aversion hangs over market

The New Zealand dollar was little changed in local trading as investors spooked by problems in some emerging economies last week were reluctant to seek riskier assets, and as trading desks in Auckland and Australia were closed for public holidays.

The kiwi traded at 82.22 US cents at 5pm in Wellington from 82.32 cents at 8am and 82.11 cents at the close of trading in New York on Friday. The trade-weighted index was almost unchanged at 77.88 from 77.86 last week.

The volume of trading was light with Auckland, New Zealand's main financial hub, closed for the city's anniversary day and Australia Day closing desks across the Tasman. Stocks across Asia fell as investors continued to spurn risk-sensitive assets after weak Chinese manufacturing figures last week sparked fears over emerging markets, and were further fanned by Argentina devaluing its peso and Turkey's central bank intervening in foreign exchange markets.

That comes ahead of policy reviews by the US Federal Reserve and New Zealand's Reserve Bank this week, which will set the direction for currency markets. The Fed may trim another US$10 billion from its US$75 billion monthly asset purchase programme, while traders are split on whether the RBNZ will start hiking interest rates at this meeting or the next.

"Markets aren't really sure what to do today as they catch up with moves in Europe and the US," said Stuart Ive, senior client adviser at OMF. "Barring any contagion from fears financial markets are breaking down, the kiwi will probably track largely sideways while we wait for the official lines from the RBNZ and FOMC (Federal Open Market Committee)."

A BusinessDesk survey of six traders and strategists predicts the local currency may trade between 80.80 US cents and 84.20 cents this week. Four predict the kiwi will fall this week, while two expect it to remain largely unchanged.

Today's BNZ-BusinessNZ performance of services index gave another indication of New Zealand's growing economic momentum, showing expansion for an eighth month, with strong reading among retailers.

The kiwi fell to 94.28 Australian cents at 5pm in Wellington from 94.76 cents on Friday in New York, and gained to 84.24 yen from 83.95 yen. It traded at 60.11 euro cents from 60.05 cents, and was little changed at 79.85 British pence from 49.83 pence last week.

(BusinessDesk)

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%