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


Strong NZD ahead of final 2012 RBNZ meeting

10.44 NZST, Wednesday 5 December 2012

Strong NZD ahead of final 2012 RBNZ meeting
By Andrew May (Sales Trader, CMC Markets New Zealand)

If you take cues from yesterday's Reserve Bank of Australia rate cut, then expect a similar resurgence to an already stubbornly high Kiwi dollar. The NZD/USD opens up 35pts today to 0.8240 literally carried in the wake of its belligerent trans-Tasman neighbour and in the face of continuing fiscal cliff deliberations.

As the RBA slashed its OCR 25pts to 3% yesterday in a fairly anticipated move, analysts were left scratching their heads as to why the AUD/USD initially dropped 20pts then spiked up around 75 to currently trade 1.0475 treading new support at 1.0460.

The robust Australian economy has been hit hard in sharp falls of commodity prices and a waning demand from China indicating bias that Australia's somewhat inconceivable resource sector boom may have peaked, yet if you compare 'apples for apples' as investors search for comparable returns, then Australia at 3% still is an incredibly attractive and viable option. And if Australian owned banks pass on the full 25bpt cut to borrowers we should see gradual stimulus and momentum return to the local economy. A key indicator on whether the 'Aussie' will remain in the high 1.04 bracket will be todays GDP.

Expect a similar showdown but with less 'fireworks' tomorrow for the final NZ OCR review for 2012. Its highly likely rates will remain unchanged for the 14th period in a row, however as we saw yesterday, the NZD/USD should be propped higher on risk appetite to test 0.8255-0.8275. Given the state of the global economy, Reserve Bank Governor Graeme Wheeler will sit on his cards for now, waiting and watching with the rest of the developed world entrenched with anticipation for the 'beginning of the end' or the 'end of the beginning' for the US economy and their looming fiscal cliff.

© Scoop Media

Business Headlines | Sci-Tech Headlines


DIY: Kiwi Ingenuity And Masking Tape Saves Chick

Kiwi ingenuity and masking tape has saved a Kiwi chick after its egg was badly damaged endangering the chick's life. The egg was delivered to Kiwi Encounter at Rainbow Springs in Rotorua 14 days ago by a DOC worker with a large hole in its shell and against all odds has just successfully hatched. More>>


Trade: Key To Lead Mission To India; ASEAN FTA Review Announced

Prime Minister John Key will lead a trade delegation to India next week, saying the pursuit of a free trade agreement with the protectionist giant is "the primary reason we're going" but playing down the likelihood of early progress. More>>



MYOB: Digital Signatures Go Live

From today, Inland Revenue will begin accepting “digital signatures”, saving businesses and their accountants a huge amount of administration time and further reducing the need for pen and paper in the workplace. More>>

Oil Searches: Norway's Statoil Quits Reinga Basin

Statoil, the Norwegian state-owned oil company, has given up oil and gas exploration in Northland's Reinga Basin, saying the probably of a find was 'too low'. More>>


Modern Living: Auckland Development Blowouts Reminiscent Of Run Up To GFC

The collapse of property developments in Auckland is "almost groundhog day" to the run-up of the global financial crisis in 2007/2008 as banks refuse to fund projects due to blowouts in construction and labour costs, says John Kensington, the author of KPMG's Financial Institutions Performance Survey. More>>


Health: New Zealand's First ‘No Sugary Drinks’ Logo Unveiled

New Zealand’s first “no sugary drinks logo” has been unveiled at an event in Wellington... It will empower communities around New Zealand to lift their health and wellbeing and send a clear message about the damage caused by too much sugar in our diets. More>>


Get More From Scoop

Search Scoop  
Powered by Vodafone
NZ independent news