NZ dollar declines after Fed hikes rates
Dollar traders waiting for more indications of future rate rises from Fed chairwoman Janet Yellen.
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The New Zealand dollar fell after the Federal Reserve raised interest rates for the first time in nearly a decade and kept its outlook for future hikes on track.
The kiwi was trading at 67.66USc at 8:30am in Wellington, from 67.79c immediately before the Fed's decision was released, and from 67.65USc at 5pm yesterday. It dropped as low as 67.10USc after the announcement.
The trade-weighted index was at 73.60 at 8:30am, from 73.69 at 8am, and 73.55 yesterday.
The Federal Reserve's policy-setting committee raised interest rates in the world's largest economy by a quarter percentage point to between 0.25% and 0.5% in a unanimous decision, and highlighted that the rate hike was a tentative beginning to a gradual tightening cycle.
The Fed's economic projections were largely unchanged from its September forecasts, with the so-called "dot plot" path for interest rates continuing to signal it planned to raise rates four times next year to take the benchmark 1% point higher.
"The US dollar is stronger across the board," ASB Bank head of institutional foreign exchange sales New Zealand Tim Kelleher says.
"They have kept the dot plots as they were, the market was expecting maybe (Fed chairwoman Janet Yellen) would trim those a little bit so the fact they have kept them as is is probably reasonably positive. It indicates another four rate hikes next year."
Traders are now awaiting further comments on the outlook from Ms Yellen.
In New Zealand today, third-quarter gross domestic product data is published at 10:45am. Economists polled by Reuters expect the economy expanded 0.8% in the quarter, for an annual rate of 2.3%.
The New Zealand dollar edged up to 93.85Ac at 8:30am, from 93.78Ac yesterday, advanced to 45.08 British pence from 44.94 pence, slipped to 61.78 euro cents from 61.84 euro cents, gained to 82.43 yen from 82.35 yen, and rose to 4.3792 yuan from 4.3717 yuan.
(BusinessDesk)
Tina Morrison
Thu, 17 Dec 2015
Thu, 17 Dec 2015
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NZ dollar declines after Fed hikes rates
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