NZ dollar edges higher as Fed minutes reiterate December rate hike bias
Fed minutes point to December interest rate hike without saying anything new.
The New Zealand dollar edged higher after this morning's release of the US Federal Reserve's minutes from its last meeting reiterated that US interest rates may rise next month, but failed to make the case any stronger.
The kiwi advanced to 64.46USc at 8.30am in Wellington, from 64.35USc immediately prior to the 8am release of the Fed minutes.
It dropped from 64.65USc at 5pm yesterday amid weaker commodity prices. The trade-weighted index was at 70.53 at 8.30am, from 70.49 at 8am and 70.77 yesterday.
The New Zealand dollar has dropped about 17% against the greenback so far this year as a strengthening US economy stokes speculation the Fed will hike interest rates, while in New Zealand interest rates are expected to continue to drop amid slower growth.
Expectations for a US rate hike in December began to build after the Federal Open Market Committee signalled the move was likely at its October meeting, however the minutes to that meeting released today didn't provide any further detail.
"They said nothing new," says Westpac Banking Corp senior market strategist Imre Speizer. "It was very much a restatement of the FOMC statement.
“It points still to a December hike but stops short of saying that explicitly. Given that the October statement was more hawkish than expected, they might have expected the minutes to expand on that and be even more hawkish still but there is nothing new in it."
Westpac's Mr Speizer expects the kiwi to decline to 62USc by the end of the year.
In New Zealand today, business price indexes for the September quarter are published at 10.45am.
The New Zealand dollar slipped to 90.85Ac at 8am from 91.09Ac yesterday, weakened to 60.46 euro c from 60.80 euro c, declined to 4.1077 yuan from 4.1263 yuan, and dropped to 42.27 British pence from 42.54 pence.
It fell to 79.47 yen from 79.74 yen yesterday ahead of the Bank of Japan meeting where no change to policy is expected.
(BusinessDesk)
Tina Morrison
Thu, 19 Nov 2015
Thu, 19 Nov 2015
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NZ dollar edges higher as Fed minutes reiterate December rate hike bias
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