Kiwi rises ahead of tomorrow's central bank statements

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The New Zealand dollar fell late in the day ahead of tomorrow's Reserve Bank review of the official cash rate, currently set at 2.5 percent.

The kiwi was at 83.16 US cents at 5pm, down from 83.61 US cents at 5pm yesterday.

The focus is on a statement by the US Federal Reserve's Open Market Committee (FOMC) at 8.15am New Zealand time tomorrow, and the cash rate review by the RBNZ at 9am.

"The RBNZ will need to be careful that it does not again pressure the New Zealand dollar higher with inferences of eventual higher interest rates, as it did in December," Derek Rankin at Rankin Treasury says.

The RBNZ is widely expected to hold the cash rate at 2.5 percent.

Imre Speizer, senior markets strategist at Westpac, says the bank's comments may be more dovish than the last press release in December, which could cause some kiwi selling.

The FOMC may reaffirm that US stimulatory programmes will be kept in place after mumbles previously of a possible exit.

"I'd expect Bernanke [Fed chairman Ben Bernanke] to say parts of the economy have improved but parts are still a bit questionable. That might cause US interest rates to dip. That's a potential up for the kiwi," Mr Speizer says.

Friday's US payrolls data is also a big event for the market but evidence ahead of it has been conflicting. "It's a crap shoot more than usual," he says.

Darren Gibbs at Deutsche Bank says the building sector here will need to drive the economy in the next two years, given pressures on the export sector and fiscal retrenchment.

According to Statistics New Zealand just 39 apartments, all retirement units, were consented in November, the lowest reading since April 2011.

"As a result it was not surprising to see a rebound in this category to 232 apartments in December," Mr Gibbs says in comment on data released today.

"This was single-handedly responsible for a 9.4 percent month-on-month rise in the total number of new dwelling consents issued in December."

The kiwi was unchanged at 80.16 Australian cents from the same level at 5pm yesterday and was up against the Japanese currency at 76.27 yen from 76.08.

It was at 62.22 euro cents from 62.16, and at 53.26 British pence from 53.27.

The trade-weighted index was at 75.37 from 75.62.

(BusinessDesk)


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NZ Market Snapshot

Forex

Sym Price Change
USD 0.6671 0.0044 0.66%
AUD 0.9093 -0.0009 -0.10%
EUR 0.6022 0.0047 0.79%
GBP 0.4284 0.0026 0.61%
HKD 5.1699 0.0342 0.67%
JPY 82.4230 0.7420 0.91%

Commods

Commodity Price Change Time
Gold Index 1096.4 -2.550 2015-07-27T00:
Oil Brent 53.5 -1.150 2015-07-27T00:
Oil Nymex 47.4 -0.720 2015-07-27T00:
Silver Index 14.6 0.110 2015-07-27T00:

Indices

Symbol Open High Last %
NZX 50 5872.1 5872.1 5872.1 -0.40%
NASDAQ 5055.9 5072.9 5088.6 -0.96%
DAX 11287.8 11297.5 11347.5 -2.56%
DJI 17561.8 17561.8 17568.5 -0.73%
FTSE 6579.8 6589.5 6579.8 -1.13%
HKSE 24269.9 24947.3 24352.0 0.91%
NI225 20188.6 20423.6 20350.1 0.30%