Kiwi dollar falls on Finance Minister's RBNZ comments

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NZN

The New Zealand dollar fell today as traders digested comments from Finance Minister Grant Robertson that the Reserve Bank's mandate will be widened.

New Zealand currency fifty dollar note money

New Zealand currency fifty, dollar note (file picture).

Source: istock.com

Meanwhile, offshore, the announcement of the new Federal Reserve chair is keenly awaited.

The kiwi fell to US68.58c as at 5pm in Wellington from US68.79c in New York on Friday.

New Finance Minister Robertson told TVNZ's Q+A show Sunday that the Reserve Bank will need to consider "other goals in the economy, such as making sure that we maximise employment" as well as price stability when making monetary policy decisions, which could see it tolerating more inflation.

At the same time, the Wall Street Journal reported that US President Donald Trump is likely to announce Federal Reserve governor Jerome Powell as his nominee to be the next chairman, a more dovish choice than another reported contender, Stanford economist John Taylor.

"Selling kiwi tends to be flavour of the month," said Tim Kelleher, head of institutional foreign exchange sales at ASB Bank.

Mr Roberston's talk of the Reserve Bank's mandate "could mean lower rates" although should Mr Trump name Mr Powell as the next Fed chair, "there is a risk of a US dollar selloff", he said.

Traders are looking ahead to the release of third-quarter labour market data on Wednesday.

Ahead of that, reports on building consents for September and business confidence for October are out tomorrow.

The labour market figures are expected to show the jobless rate held unchanged at 4.8 per cent while employment grew 0.8 per cent after an unexpected 0.1 per cent drop in the second quarter.

The kiwi traded at 52.12 British pence from 52.25 pence on Friday and slipped to 58.96 euro cents from 59.09c. It fell to A89.17c from 89.32c, fell to 4.5506 yuan from 4.5611 yuan and slipped to 77.79 yen from 78 yen.

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