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

 

ICT Innovation: Six NZ Finalists In World Summit Awards

The awards are a global showcase of 40 projects, across eight categories, with a special emphasis on those which show the benefits of information and communication technology for the development of communities. New Zealand has finalists in six of the eight categories. More>>

ALSO:

Final Frontier: Rocket Lab And NASA Sign Commercial Space Launch Agreement

Rocket Lab has signed a Commercial Space Launch Act Agreement with the National Aeronautics and Space Administration (NASA). The agreement enables Rocket Lab to use NASA resources - including personnel, facilities and equipment - for launch and reentry efforts. More>>

ALSO:

Scoop Business: Wheeler Downplays Scope For ‘Large’ Rates Fall

Reserve Bank governor Graeme Wheeler says some market commentators are predicting further declines in interest rates that would only make sense for an economy in recession, although some easing is likely to be needed to maintain New Zealand’s economic growth. More>>

ALSO:

Ruataniwha Dam: Consent Conditions Could Mean Reduced Intensity

Legal advice sought by the Hawke’s Bay Regional Council on the Ruataniwha Dam consent conditions has confirmed that farmers who sign up to take water from the dam could be required to reduce the intensity of their farming operation to meet the catchment’s strict nitrogen limit. More>>

Health And Safety: Bill Now Sees Rules Relaxed For Small Businesses

Health and safety law reform sparked by the Pike River coalmine disaster has been reported back from the industrial relations select committee with weakened requirements on small businesses to appoint health and safety representatives and committees. More>>

ALSO:

Bearing Fruit: Annual Fruit Exports Hit $2 Billion For First Time

The value of fruit exported rose 20 percent (up $330 million) for the June 2015 year when compared with the year ended June 2014. Both higher prices and a greater quantity of exports (up 9.0 percent) contributed to the overall rise. More>>

ALSO:

Get More From Scoop

 
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news