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Rich List
The New Zealand dollar declined, and could fall another 1.1 percent before finding firm support, on signs domestic economic growth is settling to a more moderate pace at a time traders are increasing bets on a revival in the greenback.
The kiwi fell to 83.63 US cents at 5pm in Wellington, from 83.88 cents at 5pm yesterday. The trade-weighted index was at 78.94 from 78.93 yesterday.
Among factors weighing on the New Zealand dollar, the ANZ-Roy Morgan Consumer Confidence Index fell 7 points to a 10-month low this month, while in the nation's second-biggest market of China, the preliminary Purchasing Managers' Index from HSBC Holdings and Markit Economics, a measure of manufacturing, fell to a lower-than-expected 50.3. That came after minutes of the last US Federal Reserve Open Market Committee meeting indicated more willingness to end stimulus measures and hike interest rates. The US dollar index is at its highest since September 2013.
"The New Zealand dollar has been at exceptional levels thanks to the outperformance of the New Zealand economy," said Sam Tuck, senior FX strategist at ANZ Bank New Zealand. "What we think now is these domestic factors have been removed, even though the economy is ticking along quite nicely. That leaves the kiwi to be driven by external factors."
Tuck said the next support levels for the kiwi are around 82.60 US cents to 82.80 cents.
Minutes from the Federal Reserve Open Market Committee showed policymakers were less concerned about low inflation and more optimistic about a pickup in the labour market, suggesting they may hasten the removal of monetary policy stimulus. Fed chair Janet Yellen has the opportunity to expand on the FOMC's views when she addresses a retreat for central bank governors at Jackson Hole, in what would be Saturday New Zealand time.
The New Zealand dollar rose to 90.32 Australian cents from 90.28 cents yesterday, and traded at 50.47 British pence from 50.51 pence. It edged up to 63.13 euro cents from 63.03 cents and gained to 86.85 yen from 86.50 yen.
(BusinessDesk)
Jonathan Underhill
Wed, 11 Jul 2018
Wed, 11 Jul 2018
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Dollar falls as economy seen settling to more modest pace, greenback rises
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