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

 

Gareth Morgan: The Government’s Fresh Water Policy – Revisited

Fresh water quality is the latest area to be in the sights of Gareth Morgan and his research organisation The Morgan Foundation... They found that the fresh water policy was a bit murkier than the Environment Minister let on. More>>

ALSO:

Interest Rates: RBNZ Hikes OCR To 3.5%, ‘Period Of Assessment’ Now Needed

Reserve Bank governor Graeme Wheeler raised the official cash rate as expected, while signalling a pause in rate hikes to assess the impact of moves so far this year. The kiwi dollar sank after Wheeler said its strength was “unjustified” and that the currency could have “a significant fall.” More>>

ALSO:

Fonterra: Canpac Site 'Resize' To Focus More On Paediatrics

Fonterra is looking at realigning its packing operations at Canpac, in the Waikato, to focus more on paediatric nutritionals... The proposed changes could mean around 110 roles may not be required at the site which currently employs 330. More>>

ALSO:

Scoop Business: Postie Plus Brand Gets 2nd Chance With Well-Funded Pepkor

The Postie Plus brand is getting a new lease of life after South Africa’s Pepkor bought the failed retailer’s assets out of administration and said it will use its purchasing power to reduce costs of stock and fatten margins. More>>

ALSO:

Warming: Warming Signs From State Of Climate Report

Climate data from air, land, sea and ice in 2013 'reflect trends of a warming planet' -- says the latest State of the Climate report, launched by U.S. and New Zealand scientists. More>>

ALSO:

Scoop Business: Embrace Falling Home Affordability, Says NZIER

Despair over the inability to afford a house is misplaced and should be embraced as an opportunity to invest in more wealth-creating activity, says the principal economist at the New Zealand Institute of Economic Research, Shamubeel Eaqub. More>>

Productivity Commission: NZ Regulation Not Keeping Pace

New Zealand regulators often have to work with out-of-date legislation, quality checks are under strain, and regulatory workers need better training and development. More>>

ALSO:

Get More From Scoop

 
 
Computer Power Plus

Standards New Zealand

Standards New Zealand
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news