Reuters New Zealand
NZ dlr dips on weak consumer spending, bonds fall
Monday July 21, 05:18 PM
WELLINGTON, July 21 (Reuters) - The New Zealand dollar NZD= eased slightly on Monday after data showed falling consumer spending, adding to nerves ahead of a central bank policy decision later this week which could see a rate cut.
Credit card and retail electronic card spending both declined in June, adding to fears the economy is in a recession, while other data showed falling migration gains and tourist numbers.
The figures added to a host of other soft economic data in recent weeks, giving the Reserve Bank of New Zealand a tough decision on Thursday on whether to start cutting its 8.25 percent benchmark rate in the face of ongoing inflation concerns.
"The market is pricing a slightly better than even chance of a cut, so the currency could react strongly on the day whichever way the decision goes," Westpac currency analyst Michael Gordon said in a note to clients.
A Reuters poll showed 13 of 17 analysts still expect the central bank to wait until September before easing, with the median chance of a cut on Thursday put at 40 percent.
With the RBNZ flagging cuts before year-end, the kiwi dollar is likely to head lower in the medium-term regardless of Thursday's decision, Gordon said.
The kiwi was at $0.7615/19 at 0500 GMT, from $0.7633/37 in late local trade on Friday. The currency ranged from $0.7596 to $0.7618 in Monday's local session.
Data showed spending on electronic card transactions, including debit, credit and charge cards, fell a seasonally adjusted 0.4 percent in June. The negative trend was reinforced by a separate release showing total credit card spending fell 0.7 percent.
Migration data from Statistics New Zealand showed migration gains halved to 490 in June from May, while short-term visitor numbers were 2 percent lower than June 2007.
The U.S. dollar drifted lower on lingering concerns about the health of the financial sector as the market looked ahead to earnings reports from regional U.S. banks this week.
Government debt weakened, with the yield on the benchmark NZ 10-year government bond NZ10YT=RR 7 basis points higher at 6.10 percent. (Reporting by Adrian Bathgate; Editing by James Thornhill)
Next Article: Welspun Gujarat Apr-June net up 2.62 pct
Previous article: NZ electronic card sales ease in June
Top Headlines
More trouble for QANTAS
Saturday September 20, 04:09 PM - Newstalk ZB
There is more trouble for QANTAS, with the airline's management in Australia forced to deny allegations it pressured an engin .. Read More
No NZX moves against short-selling
Saturday September 20, 02:31 PM - Newstalk ZB
The New Zealand Stock Exchange says it has no plans to take drastic steps like those seen on Wall Street, aimed at stopping s .. Read More
Distrust of local milkpowder offers gains for exporters
Saturday September 20, 07:16 AM - NZPA
Foreign manufacturers of milkpowder sold in China are set to cement their dominant market position as a result of the widenin .. Read More
Calculators
Copyright © 2008 Yahoo! All rights reserved.
Yahoo!Xtra: A Yahoo!7/Telecom New Zealand Company.