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

 


NZ dollar hits 9-mth high on TWI on Wheeler inflation view

NZ dollar hits 9-month high on TWI basis after Wheeler warns on housing inflation

By Paul McBeth

Dec. 6 (BusinessDesk) - The New Zealand dollar rose to a nine-month high on a trade-weighted basis after Reserve Bank governor Graeme Wheeler kept the benchmark interest rate unchanged and warned about the threat of inflation in the housing market.

The trade-weighted index rose as high as 74.15, the highest since Feb. 20, and traded at 74.03 at 5pm in Wellington from 73.52 yesterday. The kiwi advanced to 82.87 US cents at 5pm from 82.55 cents at 8am and 82.48 cents yesterday.

RBNZ's Wheeler kept the official cash rate at 2.5 percent as expected, and said on the current projections it isn't going to move until the end of 2013. The bank warned on Auckland's property market which is heating up, and sharpened the new governor's focus on inflation. The Reserve Bank is forecasting annual inflation to stay near the bottom of the band in the next year, rising to 2 percent in the March 2015 quarter as building activity ramps up and as the currency starts running out of steam.

"This really confirms he is an inflation hawk - it's mostly about inflation," said Imre Speizer, market strategist at Westpac Banking in Auckland. "I'm bullish on the kiwi for the next few days."

Speizer said the currency may break above 83.10 US cents and test 83.55 cents in Northern Hemisphere trading.

The central bank has been under increasing pressure to cut the benchmark rate in a bid to stoke economic growth and bring down the kiwi dollar, and has had to weigh that up against an Auckland property market that’s heating up.

Wheeler said the kiwi is a “significant headwind, restricting export earnings and encouraging demand for imports.” The bank has changed its view on its projections for the currency, and sees it holding above 73 on a trade-weighted basis until December 2013, and falling to 71.40 in early 2015.

The kiwi rose to 79.19 Australian cents from 78.71 cents yesterday after government figures showed unemployment across the Tasman unexpectedly fell to 5.2 percent.

New Zealand's currency rose to 68.38 yen from 67.80 yen yesterday and advanced to 63.50 euro cents from 62.90 cents. It gained to 51.52 British pence from 51.19 pence yesterday.

(BusinessDesk)

© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

Tourism: China Southern Airlines To Fly To Christchurch

China Southern Airlines, in partnership with Christchurch Airport and the South Island tourism industry, has announced today it will begin flying directly between Guangzhou, Mainland China and the South Island. More>>

ALSO:

Dodgy: Truck Shops Come Under Scrutiny

Mobile traders, or truck shops, target poorer communities, particularly in Auckland, with non-compliant contracts, steep prices and often lower-quality goods than can be bought at ordinary shops, a Commerce Commission investigation has found. More>>

ALSO:

Auckland Transport: Government, Council Agree On Funding Approach

The government and Auckland Council have reached a detente over transport funding, establishing a one-year, collaborative timetable for decisions on funding for the city's transport infrastructure growth in the next 30 years after the government refused to fund the $2 billion of short and medium-term plans outlined in Auckland's draft Unitary Plan. More>>

ALSO:

Bullish On China Shock: Slumping Equities, Commodities May Continue, But Not A GFC

The biggest selloff in stock markets in at least four years, slumping commodity prices and a surge in Wall Street's fear gauge don't mean the world economy is heading for another global financial crisis, fund managers say. More>>

ALSO:

Real Estate: Investors Driving Up Auckland Housing Risk - RBNZ

The growing presence of investors in Auckland's property market is increasing the risks, and is likely to both amplify the housing cycle and worsen the potential damage from a downturn both to the financial system and the broader economy, said Reserve Bank deputy governor Grant Spencer. More>>

ALSO:

Annual Record: Overseas Visitors Hit 3 Million Milestone

Visitor arrivals to New Zealand surpassed 3 million for the first time in the July 2015 year, Statistics New Zealand said today. The record-breaking 3,002,982 visitors this year was 7 percent higher than the July 2014 year. More>>

ALSO:

Get More From Scoop

 
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news