Friday 22nd October 2010 |
Text too small? |
The New Zealand dollar fell ahead of the weekend’s G-20 finance ministers’ summit in Korea, with speculation rife policy-makers will try and reach some accord to dull the so-called currency wars.
The threat of New Zealand losing the US$500 million production of ‘The Hobbit’ was also reported in the Wall Street Journal as a factor adding to the kiwi dollar’s weakness.
“RBC Capital Markets foreign exchange strategists noted that the New Zealand dollar was the second worst performing G10 currency overnight, with downside pressure on the kiwi coming from the “Hobbit” news,” the WSJ reported.
US Treasury Secretary Tim Geithner told the Wall Street Journal America would like countries to find a “set of norms on exchange rate policy” instead of looking to artificially devalue their currencies in a bid to stoke exports and lift economic performance.
That comes amid rising speculation the Federal Reserve will embark on a second round of printing money next month to help revive the sagging US recovery, though St Louis Fed President James Bullard said quantitative easing isn’t a done deal and he’ll wait until he sees the data before making a decision.
“We might get something (out of the summit) as there were some pretty strong words overnight” from the likes of Geithner and Bullard, said Tim Kelleher, vice president of institutional banking and markets at Commonwealth Bank of Australia.
“The kiwi’s drifting off, but it’s going to need a U.S. dollar rally to go lower.” The kiwi fell to 74.71 US cents from 74.92 cents yesterday, and declined to 66.41 on the trade-weighted index of major trading partners’ currencies from 66.49.
It was little changed at 60.76 yen from 60.74 yen yesterday and edged up to 76.30 Australian cents from 76.27 cents. It decreased to 53.63 euro cents from 53.72 cents yesterday, and crept up to 47.56 pence from 47.51 pence.
Kelleher said the currency may trade between 74.40 US cents and 74.90 cents today with investors likely stay on the sidelines until after the G-20 meeting. Investors’ appetite for higher-yielding assets took a dent on weaker-than-expected French manufacturing data and soft British retail sales, while less gloomy jobless claims in the US stoked demand for the greenback.
Businesswire.co.nz
No comments yet
Second St John withdrawal of labour takes effect tomorrow with further strikes likely
Sanford Appoints Independent Director
CRP ADVISES CLOSURE OF SHARE OFFER TO EXISTING INVESTOR
Devon Funds Morning Note - 14 August 2024
OCR 5.25% - Monetary restraint tempered as inflation converges on target
Consumers still need due diligence as new deposit takers emerge.
Woolworths strike: staff asked to dress up in Disney costumes for a week on their own dollar
Turners Invests in Quashed Online Insurance Platform
PGW Reports on Challenging Year
Arvida Announces Executive Team Changes