Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search

 


NZ dollar falls on benign inflation, RBA outlook

NZ dollar falls on benign inflation, RBA outlook

By Paul McBeth

Oct. 16 (BusinessDesk) - The New Zealand dollar fell in local trading as a more benign than expected inflation report and a weaker Australian economic outlook trimmed the appeal of the currency.

The kiwi fell as low as 81.40 US cents and traded at 81.57 cents at 5pm in Wellington, down from 81.82 cents at 8am and up from 81.43 cents yesterday. The trade-weighted index was unchanged at 72.80.

New Zealand's 90-day bank bill rate fell 5 basis points to 2.65 percent and the two-year swap rate declined 7 basis points to 2.47 percent after consumer prices rose at a slower than expected pace of 0.3 percent in the September quarter. That took annual inflation to 0.8 percent, below the Reserve Bank's target band of between 1 percent and 3 percent. The data comes before new central bank governor Graeme Wheeler delivers his first official cash rate review next week.

The OCR review "is a real focus regardless of what inflation is doing right now - there are a whole lot of questions about the new governor and whether the new policy target agreement is something we should read a lot into," said Chris Tennent-Brown, FX economist at Commonwealth Bank of Australia in Sydney.

Minutes from the Reserve Bank of Australia's Oct. 2 meeting show the board sees an "increased likelihood of growth over the coming year being somewhat weaker than earlier forecast." Australia has been dealing with a slowdown in its resources industry, a sector that helped it avoid recession during the global financial crisis. The kiwi fell to 79.46 Australian cents from 79.81 cents yesterday.

Tennent-Brown said the main focus for the trans-Tasman currencies this week will be the dump of Chinese data on Oct. 18, which is expected to show slowing economic growth in the world's most populous nation.

CBA expects the Australasian currencies will end the year higher with their respective economies in better shape than Europe, which is dealing with a sovereign debt crisis, and the US, which faces massive austerity if policymakers can't address the so-called 'fiscal cliff' after next month's Presidential election.

With trading volatility at the lowest level since before the 2008 global financial crisis, "the fundamentals of the Australian and New Zealand dollars will keep flowing through and the currencies will stay strong," he said.

The rose to 64.28 yen from 63.87 yen yesterday and slipped to 62.92 euro cents from 63.08 cents. It was little changed at 50.76 British pence from 50.74 pence yesterday.

(BusinessDesk)

© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

Budget Policy Statement: Spending Wins Over Tax Cuts; Big Ticket Items Get Boost

Income tax cuts are on hold as the government says “responding to the earthquakes and reducing debt are currently of higher priority”, although election year tax sweeteners remain possible. More>>

ALSO:

Fishy: Is Whitebaiting Sustainable?

The whitebait fry - considered a delicacy by many - are the juveniles of five species of galaxiid, four of which are considered threatened or declining. The SMC asked freshwater experts for their views on the sustainability of the whitebait fishery and whether we're doing enough to monitor the five species of galaxiid that make up whitebait. More>>

ALSO:

Crown Accounts: Smaller-Than-Expected Four-Month Deficit

The New Zealand government's accounts recorded a smaller-than-forecast deficit in the first four months of the fiscal year on a higher-than-expected inflow of corporate and goods and services tax. More>>

ALSO:

On For Christmas: KiwiRail Ferries Back In Full Operation After Quake

KiwiRail’s Interislander ferries are back in full operation for the first time since the Kaikoura earthquake, with the railspan that allows rail wagons to be loaded on the Aratere now restored. More>>

ALSO:

Comerce Commission Investigation: Prosecutions Over Steel Mesh Labelling

Steel & Tube Holdings, along with two other companies, will be prosecuted by the Commerce Commission following the regulator's investigation into seismic steel mesh, while Fletcher Building's steel division has been given a warning. More>>

ALSO:

Wine: 20% Of Marlborough Storage Tanks Damaged By Quake

An estimated 20 percent of wine storage tanks in the Marlborough region, the country’s largest wine producing area, have been damaged by the impact of the recent Kaikoura earthquake. More>>

ALSO:

ACC: Levy Recommendations For 2017 – 2019 Period

• For car owners, a 13% reduction in the average Motor Vehicle levy • For businesses, a 10% reduction in the average Work levy, and changes to workplace safety incentive products • For employees, due to an increase in claims volumes and costs, a 3% increase in the Earners’ levy. More>>

Get More From Scoop

 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news