NZ dollar declines

money-nz-dollar, notesThe kiwi dollar has fallen ahead of United States inflation data, which may provide clues to the pace of rate hikes there.

Domestically traders will be watching for a speech by acting Reserve Bank governor Grant Spencer and February food prices.

The New Zealand dollar declined to US72.93c as at 0800 in Wellington from US73.23c late on Monday.

The trade-weighted index fell to 74.71 from 75.03.

US consumer price inflation, excluding food and energy, may have slowed to 0.2 per cent in February for an unchanged year-on-year rate of 1.8 per cent, based on economist surveys.

The data comes after employment figures last Friday showed slower-than-expected wage growth, which had traders questioning whether the Federal Reserve will hike three times or four this year.

The Federal Open Market Committee meets next week.

“An upside surprise (and what that could potentially suggest for Fed tightening) could lead to some currency volatility,” ANZ Bank New Zealand senior economist Philip Borkin said.

In the interest rate market, the focus is on the pricing for the Debt Management Office’s 2029 bond syndication, with initial guidance at 16 to 19 basis points over the 2027 nominal bond.

Borkin said ANZ’s fair value estimate is for a spread of 16 basis points.

He also said the DMO may sell $2 billion of the debt, the top end of its $1.5b to $2b range, and he expects “solid” demand.

The yield on the April, 2027 government bond was last at 3.02 per cent.

On Tuesday, Spencer is due to give a speech entitled ‘Getting the best out of macroprudential policy’, while the food price index for February is due out in the morning.

In Australia, the NAB business confidence survey for February will be in focus.

The kiwi fell to 77.56 yen from 78.05 yen on Monday and declined to A92.60 cents from A93.06c.

It fell to 59.09 euro cents from 59.39 euro cents and declined to 52.43 British pence from 52.81 pence. It fell to 4.6143 yuan from 4.6333 yuan.


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