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

 


NZ dollar heads for weekly drop vs. Australian dollar

NZ dollar heads for 1.7 percent weekly drop vs. Australian dollar as jobs market deteriorates

By Paul McBeth

Nov. 9 (BusinessDesk) - The New Zealand dollar is headed for a 1.7 percent weekly decline against its Australian counterpart after the local labour market showed major signs of deterioration and as the Reserve Bank of Australia kept interest rates on hold.

The kiwi traded at 78.30 Australian cents at 5pm in Wellington from 78.49 cents yesterday. It traded at 81.61 US cents from 81.67 cents yesterday, and is poised for a 1 percent weekly decline against the greenback.

New Zealand's currency underperformed its Australian counterpart this week after a 13-year high unemployment rate stoked bets the Reserve Bank will cut rates, while Australia's central bank kept its own benchmark rate on hold this week.

Investors have previously rallied behind the kiwi on the expectation interest rate differentials will start moving in New Zealand's favour. The RBA today cut its growth forecast for 2013 to year-average GDP growth of 2.25 percent to 3.25 percent in 2013, down from its August estimate of 2.75 percent to 3.25 percent.

"We've seen a lot of the momentum taken out of the kiwi/Aussie cross over the last couple of weeks," said Dan Bell, currency strategist at HiFX in Auckland. "Australia still has challenges and the RBA is more likely to cut rates over the next few months than the RBNZ," which means interest rate differentials should move back in the kiwi dollar's favour, he said.

Risk-sensitive currencies, such as the Australian and New Zealand dollars, have been under pressure this week as investors get nervous about the so-called 'fiscal cliff' of US$600 billion of tax hikes and spending cuts for the US Federal government.

That's put pressure on New York stock markets, with the Standard & Poor's 500 index ending its bull-run, and dropping to a three-month low below 1,400.

"The uncertainty looks at more risk aversion, which will be negative for the New Zealand against the US dollar," Bell said.

Local data showed a pick-up in New Zealand house prices and sale volumes, and an increase in retail spending on electronic cards.

The trade-weighted index fell to 72.98 from 73.11 yesterday, and is poised for a 1.1 percent weekly decline. The kiwi dropped to 64.90 yen from 65.13 yen yesterday and declined to 63.87 euro cents from 63.99 cents. New Zealand's currency decreased to 50.96 British pence from 51.07 pence yesterday.


(BusinessDesk)

© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

Trade Plans: Prime Minister's Speech To International Business Forum

"The work to improve public services, build infrastructure, and solve social problems is possible only because we have enjoyed sustained, solid economic growth. A big reason for that is the Government’s consistent agenda of economic reform, and our determination to open up more opportunities for trade with the world." More>>

ALSO:

Media: TVNZ Flags Job Cuts To Arrest Profit Decline

Chief executive Kevin Kenrick said the changes were aimed at creating "a sustainable future video content business for TVNZ in an ever-changing media market." More>>

ALSO:

Reserve Bank: Wheeler Keeps OCR At 1.75%

Reserve Bank governor Graeme Wheeler kept the official cash rate unchanged at 1.75 percent, as expected, and reiterated his view that the benchmark rate doesn't need shifting for the foreseeable future. More>>

ALSO:

Retail: Pumpkin Patch Brand, IP Sold To Catch Group

The receivers of failed children's clothing retailer Pumpkin Patch have confirmed that the company's brand and intellectual property have been sold to Australian online retailer Catch Group. More>>

ALSO:

Oil: 2017 Block Offer Petroleum Tender Launched

New Zealand is well-placed to take advantage of the economic benefits of oil and gas exploration, Energy and Resources Minister Judith Collins announced today at the launch of the 2017 Block Offer petroleum tender. More>>

ALSO:

Get More From Scoop

 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news