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

 


NZ dollar gains after RBA cuts interest rates

NZ dollar gains after RBA cuts interest rates in a bid to revive slowing economy

By Paul McBeth

Dec. 4 (BusinessDesk) - The New Zealand dollar followed its Australian counterpart higher after the Reserve Bank of Australia cut interest rates to a level not seen since 2009 in a bid to revive economic activity as the resources boom peters out.

The kiwi rose to 82.29 US cents at 5pm in Wellington from 82.04 cents immediately before the RBA announcement, and was up from 82.10 cents at 8am and 81.95 cents yesterday. The Australian dollar jumped to US$1.0446 at 5pm in Wellington from US$1.0417 immediately before the release.

The RBA board cut the target cash rate a quarter point to 3 percent, as expected, in a bid to "foster sustainable growth in demand and inflation outcomes consistent with the target over time," governor Glenn Stevens said. The RBA has started seeing signs of easier monetary conditions emerge, though the Australian dollar was still higher than expected, and Stevens said the resources boom is near its peak.

The currency price action "was pretty unusual - there was nothing in the commentary to suggest they're done" cutting rates, said Chris Tennent-Brown, FX economist at Commonwealth Bank of Australia in Sydney. "Ultimately, I expect the Aussie to drift back to pre-announcement levels and the kiwi dollar as well."

The RBA's review comes two days before the Reserve Bank of New Zealand reviews monetary policy, with governor Graeme Wheeler tipped to keep the official cash rate on hold at 2.5 percent. That would cut Australia's interest rate advantage to half a percentage point.

"With the housing backdrop, there's very little chance the RBNZ's going to cut now or subsequently unless the offshore stuff takes a real turn for the worse," Tennent-Brown said.

New Zealand commodity prices rose 1 percent for a fourth straight month in November, according to ANZ New Zealand figures. That comes a day after government figures showed the country's terms of trade fell to a three-year low in the September quarter as a strong currency eroded returns on dairy exports.

The kiwi was little changed at 78.73 Australian cents at 5pm in Wellington from 78.68 cents yesterday.

RBNZ's Wheeler was drawn into local politicking by the Green Party today, scotching claims the central bank has a bias towards the Australian lenders without directly addressing accusations he misled Parliament over the banks' returns.

New Zealand's currency was little changed at 67.57 yen from 67.53 yen yesterday, and increased to 62.99 euro cents from 62.84 cents. It was unchanged at 51.09 British pence, and gained on a trade-weighted basis to 73.45 from 73.32 yesterday.

(BusinessDesk)

© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

Future Brighter Money: RBNZ Releases New Bank Note Designs

New Zealand’s banknotes are getting brighter and better, with the Reserve Bank today unveiling more vibrant and secure banknote designs which will progressively enter circulation later next year. More>>

ALSO:

Commerce: Supermarket Inquiry Finds No Breaches By Countdown

The Commerce Commission inquiry into anti-competitive behaviour by Countdown supermarkets, alleged by former Labour Party MP Shane Jones, has found nothing to warrant prosecution, although it warns supermarkets to take care in the way they communicate... More>>

ALSO:

Crown Accounts: English Flags ‘Challenge’ To Budget Surplus

Finance Minister Bill English is warning next month’s half yearly fiscal and economic update from the Treasury may not forecast a budget surplus, saying that returning the government’s accounts to surplus in 2015 will be “a challenge”, given the decline in commodity prices and weak global inflation. More>>

ALSO:

March 2015: Netflix To Launch In Australia And New Zealand

World’s Leading Internet Television Network to Offer Original Series, Movies, Documentaries, Stand-Up Comedy Specials and TV Shows for Low Monthly Price More>>

ALSO:

Price Of Cheese (Is Up): Dairy Product Prices Fall To Five-Year Low

Dairy product prices fell in the latest GlobalDairyTrade auction to the lowest level in more than five years, led by declines in rennet casein and skim milk powder. More>>

ALSO:

Gordon Campbell: On The Australians Scoring Trade Points Against Us With The Chinese

It hasn’t been a great year for Trade Minister Tim Groser... To top it off, Australia has just signed a FTA with China that has far better provisions on dairy exports than what New Zealand currently enjoys in our own FTA with China. More>>

ALSO:

Iwi & Local Consultation: Oil And Gas Block Offer 2015 Begins

Energy and Resources Minister Simon Bridges today announced the start of the Block Offer 2015 process for awarding oil and gas exploration permits. More>>

Industrial Action: Stats NZ Throwing Public Money Away Duplicating Data

The Public Service Association (PSA) says Statistics NZ are throwing money away by collecting the same data twice for official statistics such as the Consumer Price Index... As part of the ongoing industrial action, field interviewers who are PSA members are continuing to collect data, but are not sending it through to Statistics NZ. More>>

ALSO:

Other Stats:

Space: Rosetta's 'Philae' Makes Historic First Landing On A Comet

After more than a decade traveling through space, a robotic lander built by the European Space Agency has made the first-ever soft landing of a spacecraft on a comet. More>>

ALSO:

Get More From Scoop

 
 
Standards New Zealand

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