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

 


NZ dollar little changed vs. Oz dollar as RBA looms

NZ dollar little changed vs. Australian dollar after weak retail sales, as RBA looms

By Paul McBeth

Dec. 3 (BusinessDesk) - The New Zealand dollar was little changed against its Australian counterpart as sluggish consumer spending across the Tasman stoked speculation the Reserve Bank of Australia may cut interest rates deeper than initially anticipated.

The kiwi traded at 78.68 Australian cents from 78.65 cents on Friday in New York. The currency was little changed at 81.95 US cents at 5pm in Wellington from 82.04 cents at 8am, and 81.98 cents last week.

Australia's retail trade was unchanged last month, according to government figures, falling short of the 0.4 percent growth expected by economists. That's heightened expectations the RBA may have to cut the target cash rate more than anticipated to keep the nation's economy ticking over as the resources boom slowly unwinds. Traders are pricing in 72 basis points of cuts to the 3.25 percent benchmark rate over the coming 12 months, according to the Overnight Index Swap curve.

"Now capex is weaker, markets are looking for stuff to take its place like consumer spending – but on the face of it, it's not going to take the job of the resources boom," said Imre Speizer, market strategist at Westpac Banking Corp in Auckland. "There's a chance it (the kiwi) could break above 80 Australian cents" this week, he said.

The RBA meeting tomorrow comes ahead of gross domestic product and employment later in the week, and New Zealand's central bank meeting on Thursday.

Reserve Bank of New Zealand governor Graeme Wheeler is expected to keep the official cash rate at 2.5 percent, which would effectively reduce Australia's yield advantage if the RBA cuts as expected tomorrow.

"Wheeler might be a little bit hawkish by talking about the housing market in Auckland and Christchurch and its potential for producing inflation," Speizer said.

Government figures today showed deteriorating terms of trade in the third quarter, with export prices for dairy products sliding 13 percent, even as the volume sold surged 32 percent. Earlier this month, Wheeler told politicians the currency is more closely aligned to the terms of trade over the long term than interest rate adjustments.

A BusinessDesk survey of strategists predicts the kiwi will probably fall against the greenback this week with a slowing Australia taking its toll on the local currency, and as US policymakers dither in trying to cut a deal to avoid the fiscal cliff - US$607 billion in automatic tax hikes and spending cuts scheduled to kick in on Jan. 1.

Three of those polled see it ending the week lower, two higher and two see it range-bound.

The kiwi dollar traded at 67.53 yen at 5pm in Wellington from 67.58 yen last week while the trade-weighted index was little changed at 73.32 from 73.39. The New Zealand dollar fell to 62.84 euro cents from 63.10 cents and declined to 51.09 British pence from 51.21 pence.

(BusinessDesk)

© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

Statistics: Dairy And Travel Still Our Largest Export Earners

New Zealand earned $2.3 billion more from exports than we spent on imports during the year ended June 2015... total exports of goods and services were $67.5 billion, while total imports were $65.1 billion. More>>

ALSO:

Approval: Air New Zealand And Air China Launch New Alliance Route

Air New Zealand and Air China have today launched joint sales for a new daily direct service between Auckland and Beijing after receiving approval from New Zealand Minister of Transport Hon Simon Bridges to form a strategic alliance. More>>

ALSO:

Money Trading: FX Trader Jin Yuan Finance Warned Over Lack Of Monitoring

Jin Yuan Finance, an Auckland-based foreign exchange trader, has been warned over its lack of anti-money laundering processes in place in the first public notification by the Department of Internal Affairs. More>>

ALSO:

Auckland Surge, Possible Peak: House Values Accelerate At Fastest Annual Pace In 8 Years

New Zealand residential property values rose at their fastest annual pace in eight years in August, pushed higher by overflowing demand in Auckland, which is showing signs speculators think it has reached its peak, according to Quotable Value. More>>

ALSO:

Cash Money: Reserve Bank Launches New $5 And $10 Banknotes

The $5 and $10 final banknotes were revealed at an event at the Bank in Wellington, and will start to be released from mid-October 2015. More>>

ALSO:

Truck Sales Booted: Commerce Commission Files Charges Against Mobile Trader

The Commerce Commission has filed charges against a mobile trader, or truck shop operator, claiming he obtained money from customers by deception and never intended to supply them with the goods they paid for. More>>

ALSO:

Get More From Scoop

 
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news