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


NZ dollar heads for 1.4% weekly gain; RBNZ won't cut rates

NZ dollar heads for 1.4% weekly gain after RBNZ quashes rate cut talk

By Paul McBeth

Dec. 7 (BusinessDesk) - The New Zealand dollar is headed for a 1.4 percent gain this week after Reserve Bank governor Graeme Wheeler quashed expectations for a rate cut, singling out the country's inflationary pressures as his number one bugbear.

The kiwi traded at 83.18 US cents at 5pm in Wellington from 83.12 cents at 8am and 82.87 cents yesterday. The trade-weighted index climbed to 74.42 from 74.03 yesterday, and is heading for a 1.1 percent weekly gain.

Traders have wound back their expectations for a rate cut after RBNZ's Wheeler kept the official cash rate at 2.5 percent and told reporters it will stay there until the end of 2013 as he keeps tabs on an Auckland property market that’s heating up and building inflation pressures in the Canterbury rebuild.

US non-farm payrolls aren't expected to grab too much attention when they're released today in Washington DC, due to the impact of Hurricane Sandy, though investors will continue to keep tabs on the ability of US legislators to make any progress on stalled talks to prevent US$607 billion of automatic tax hikes and spending cuts from kicking in next month.

"The part of the economy most likely to stimulate with cuts is the part that least needs it," said Chris Tennent-Brown, FX economist at Commonwealth Bank of Australia in Sydney. The trans-Tasman currencies "are going reasonably well into year-end and people aren't too worried about the fiscal cliff at this stage."

Investors have shifted their focus to next week's Federal Open Market Committee meeting, where the US central bank may replace Operation Twist, a programme of selling shorter-dated debt and buying bonds with longer maturities.

Chinese industrial production and retail sales figure will also be watched this weekend as investors gauge the health of the world's second-biggest economy.

The kiwi jumped to 64.15 euro cents from 63.50 cents yesterday, and advanced to 51.80 British pence from 51.52 pence.

New Zealand's currency rose to 79.36 Australian cents from 79.19 cents yesterday, and gained to 68.61 yen from 68.38 yen.


© Scoop Media

Business Headlines | Sci-Tech Headlines


Land & Water Forum: Fourth Report On Water Management

The Land and Water Forum (LWF) today published its fourth report, outlining 60 new consensus recommendations for how New Zealand should improve its management of fresh water and calling on the Government to urgently adopt all of its recommendations from earlier reports. More>>



Welcome Home: Record High Migration Stokes 41-Year High Population Growth

New Zealand annual net migration hit a new high in October as more people arrived from than departed for Australia for the first time in more than 20 years. More>>


Citizens' Advice Bureau: Report Shows Desperate Housing Situation Throughout NZ

CAB's in-depth analysis of over 2000 client enquiries about emergency accommodation shows vulnerable families, pregnant women and children living in cars and garages, even after seeking assistance from the Ministry of Social Development and Housing New Zealand. More>>


Speaking For The Bees: Greens Call For Neonicotinoid Pesticide Ban

The National Government should ban the use of controversial pesticides called neonicotinoids after evidence has revealed that even at low doses they cause harm to bee populations, the Green Party said today. More>>


Get More From Scoop

Search Scoop  
Powered by Vodafone
NZ independent news