Dollar little changed at start of week that will deliver Fed decision, GDP
Kiwi dollar traded at 63.02USc as at 8am in Wellington.
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The New Zealand dollar was little changed from the New York close on Friday ahead of local data that may show the economy accelerated in the second quarter and before a key meeting of the US Federal Reserve that has an outside chance of delivering an interest rate hike.
The kiwi dollar traded at 63.02USc as at 8am in Wellington, from 63.13USc in late New York trading on Friday. The trade-weighted index was little changed at 68.42 from 68.48.
The Federal Open Market Committee meets this week with a rate hike given just 30% odds by traders, although about half the analysts in a Bloomberg survey are predicting a move, and some conditions for a hike, such as an improving labour market, have appeared. The split in opinion suggests the outcome of the FOMC meeting could drive a sharp move in markets. In New Zealand, the balance of payments is released on Wednesday and gross domestic product on Thursday, which are expected to show a widening current account deficit and a 0.6% expansion of GDP in the second quarter. Results of the latest GlobalDairyTrade auction are also out Wednesday morning.
"It's an important week for markets, with a real possibility that US policy rates might rise for the first time since 2006," said Raiko Shareef, a strategist at Bank of New Zealand. "Investors are clearly sceptical, with the market pricing the odds of a lift-off at less than one-third."
Bank of New Zealand expects the Fed will wait until December to move on rates, while at home it is forecasting a 0.8% rise in second-quarter GDP but "with risks skewed to lower."
Over the weekend, Reserve Bank governor Graeme Wheeler gave an interview to the NZ Herald, in which he appeared to indicate a further rate cut could come as soon as October. Mr Wheeler cut the official cash rate a quarter point to 2.75% last week and projected a track for the 90-day bank bill rate that suggests the OCR will be cut again to 2.5%.
The New Zealand dollar traded at 88.96Ac from 88.92Ac on Friday and fell to 4.0166 yuan from 4.0217 yuan. The kiwi declined to ¥75.92 from ¥76.07 and traded at 40.83 British pence from 40.90p. It was little changed at 55.60 euro cents from 55.64 cents.
(BusinessDesk)
Jonathan Underhill
Mon, 14 Sep 2015
Mon, 14 Sep 2015
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Dollar little changed at start of week that will deliver Fed decision, GDP
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