Dollar falls as Fed official fans rate-hike talk
The kiwi fell to 72.45USc at 8am in Wellington. With special feature audio.
The New Zealand dollar fell after San Francisco Federal Reserve president John Williams revived talk of a rate hike as soon as September, taking a little of the shine off the kiwi's high yield.
The kiwi fell to 72.45USc at 8am in Wellington, from 72.68USc in late New York trading on Friday. The trade-weighted index fell to 76.82 from 77.05.
Mr Williams, a non-voting Fed member, said that the US economy had "good momentum" and it made sense to return to gradual increases, "preferably sooner rather than later." With little local data scheduled, the market will likely take its lead from the US in the run-up to a speech by Fed chairwoman Janet Yellen at the Jackson Hole symposium next weekend, where she may give a clearer steer on the timing of rate hikes. Currently, the market is betting on a December hike in the US and a quarter-point cut by the Reserve Bank before that.
"The Reserve Bank's easing cycle combined with the Fed tightening in December should push the NZ dollar lower toward 70USc by year end," said Imre Speizer, senior market strategist at Westpac Banking Corp. Still, recent easing by the Bank of England and Bank of Japan "have made the NZ dollar even more attractive to global investment flows such that a break above 74USc is a possible first."
The local currency rose to 95.25Ac from 94.56Ac on Friday in New York. It slipped to 4.8197 yuan from 4.8336 yuan and fell to 64.06 euro cents from 64.18 cents. The local currency was little changed at 55.56 British pence from 55.58 pence and rose to ¥73.04 from ¥72.77.
(BusinessDesk)
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Jonathan Underhill
Mon, 22 Aug 2016
Mon, 22 Aug 2016
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Dollar falls as Fed official fans rate-hike talk
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