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

 


RESEND: NZ dollar creeps higher after RBA rate cut

RESEND: NZ dollar creeps higher as RBA rate cut eases concerns for Australian economy

By Paul McBeth

(Removes extraneous figure in second paragraph)

Dec. 5 (BusinessDesk) - The New Zealand dollar followed its Australian counterpart higher after the Reserve Bank of Australia cut interest rates in line with expectations and soothing fears the world's 12th biggest economy could be in for a big fall as its mining boom peaks.

The kiwi increased to 82.43 US cents at 8am in Wellington from 82.29 cents yesterday, following the Australian dollar's lead, which rose to US$1.0472 from US$1.0446. The kiwi was little changed at 78.68 Australian cents from 78.73 cents yesterday.

The RBA cut the target cash rate a quarter point to 3 percent, the lowest level since the depths of the global financial crisis and matching a five-decade low. Governor Glenn Stevens said the bank has started seeing signs of looser monetary policy emerge, and was seen as a move to foster growth outside the resources sector which has underpinned the economy in recent years. Government figures today are expected to show the Australian economy grew 0.6 percent in the September quarter.

"The accompanying statement highlighted the negatives, but there were no new negatives and markets are in the mood to take no news as good news," said Kymberly Martin, strategist at Bank of New Zealand in Wellington. "If the RBNZ comes out (tomorrow) and points to the obvious things about the economy and provides no new fears, we might have a similar reaction."

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.

BNZ's Martin said the currency may trade between 82 US cents and 82.60 cents today.

Dairy prices at Fonterra Cooperative Group's online auction fell 2 percent, with the exporters increasing the supply available. The sale came a day after ANZ New Zealand data showed New Zealand commodity prices rose for a fifth month in November and after government figures this week 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.

Global investor sentiment was flat as US policymakers continued to cling to their partisan colours as they struggle to avert the US$607 billion fiscal cliff of spending cuts and tax increase. The latest deal put forward by senior Republican and House of Representatives Speaker John Boehner was shot down within an hour by the White House, and highlighted fractures within the Republican party.

New Zealand's trade-weighted index was unchanged at 73.45, and the kiwi was little changed at 67.51 yen at 8am in Wellington from 67.57 yen yesterday. The currency traded at 62.95 euro cents from 62.99 cents yesterday, and increased to 51.20 British pence from 51.09 pence.

(BusinessDesk)

© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

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:

NASA, NOAA: Find 2014 Warmest Year In Modern Record

Since 1880, Earth’s average surface temperature has warmed by about 1.4 degrees Fahrenheit (0.8 degrees Celsius), a trend that is largely driven by the increase in carbon dioxide and other human emissions into the planet’s atmosphere. The majority of that warming has occurred in the past three decades. More>>

ALSO:

Scoop Business: New Zealand’s Reserve Bank Named Central Bank Of The Year

The Reserve Bank of New Zealand’s efforts to stifle house price inflation by using new policy tools has seen the institution named Central Bank of the year by Central Banking Publications, a publisher specialising in global central banking practice. More>>

ALSO:

Science Media Centre: Viral Science And Another 'Big Dry'?

"Potentially, if there is no significant rainfall for the next month or so, we could be heading into one of the worst nation-wide droughts we’ve seen for some time," warns NIWA principal climate scientist Dr Andrew Tait. More>>

ALSO:

Get More From Scoop

 
 
Standards New Zealand

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