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

 

Housing: Affordability Drops 14%, Driven By Auckland Prices

Housing affordability across New Zealand fell 14 percent in the year ending November 2014, with Auckland’s lack of affordability set to reach levels it hit during the height of the global financial crisis, according to the latest Massey University Home Affordability Report More>>

ALSO:

The Dry: Fonterra Drops Forecast Milk Volumes By 3.3 Percent

Fonterra Cooperative Group, the worlds largest dairy exporter, reduced its milk volume forecast for the 2014-2015 season by 3.3 per cent due to the impact of dry weather on production in recent weeks. More>>

ALSO:

Strike: Lyttelton Port Workers Vote To Escalate Dispute

Members of the Rail and Maritime Transport Union (RMTU) at Lyttelton Port today voted to escalate their industrial action. Around 200 RMTU members have been operating an overtime ban since 17 December and today they endorsed a series of full withdrawals of labour at the port. More>>

ALSO:

Scoop Business: NZ Dollar Falls To 3-Year Low As Investors Favour Greenback

The New Zealand dollar fell to its lowest in more than three years as investors sold euro and bought US dollars, weakening other currencies against the greenback. More>>

ALSO:

Scoop Business: NZ Govt Operating Deficit Smaller Than Expected

The New Zealand’s government’s operating deficit was smaller than expected in the first five months of the financial year as a clampdown on expenditure managed to offset a shortfall in the tax-take from last month’s forecast. More>>

ALSO:

0.8 Percent Annually:
NZ Inflation Falls Below RBNZ's Target

New Zealand's annual pace of inflation slowed to below the Reserve Bank's target band in the final three months of the year, giving governor Graeme Wheeler more room to keep the benchmark interest rate lower for longer.More>>

ALSO:

Get More From Scoop

 
 
Standards New Zealand

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