Dollar falls as Dudley points to 2015 rate hike, stocks fall, risk aversion rises
Local dollar fell to 63.32USc as at 8:30am in Wellington.
The New Zealand dollar fell after New York Federal Reserve president William Dudley said he expects US interest rates to be raised this year, although on a low trajectory, while a drop in global stock markets sapped risk appetite and demand for growth-linked currencies such as the kiwi.
The local dollar fell to 63.32USc as at 8:30am in Wellington, from 63.99USc late yesterday. The trade-weighted index fell to 69.18 from 69.79.
Equity markets in Europe and the US fell, and commodities dropped amid concern growth in China may be slowing, after figures yesterday showed weaker Chinese industrial profits. The Fed's Dudley – one of nine US central bank officials talking this week – said he expects the US economy will continue at its current pace, meaning "we probably will raise interest rates later this year."
"The US dollar slipped against both the euro and the yen amid broad-based risk aversion but forged ahead against the likes of Australian dollar, New Zealand dollar and emerging markets currencies," strategists at Westpac Banking Corp said in a note.
Helping lift speculation that the US economy is continuing to expand apace, US personal spending data rose in August, suggesting consumption will continue to underpin growth, although pending home sales fell a greater-than-expected 1.4%.
The local currency fell to ¥75.87 yen from ¥77.02 as risk aversion drove some investors to the relative safety of the Japanese currency, while the kiwi dropped to 4.0281 yuan from 4.0769 Chinese yuan. The New Zealand dollar fell to 56.33 euro cents from 57.18 euro cents and declined to 41.69 British pence from 42.09p. The kiwi declined to 90.47Ac from 91Ac yesterday.
(BusinessDesk)
Margreet Dietz
Tue, 29 Sep 2015
Tue, 29 Sep 2015
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Dollar falls as Dudley points to 2015 rate hike, stocks fall, risk aversion rises
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