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

 


Kiwi treads water in holiday trade ahead of OCR review

Kiwi treads water in holiday trade ahead of OCR review

Jan. 28 (BusinessDesk) – The New Zealand dollar was mixed in a holiday-affected session on Monday ahead of the official cash rate review on Thursday.

Both the kiwi and aussie dollars were weak against a resurgent euro.

The euro hit an 11-month high versus the dollar on Friday after the European Central Bank said banks would pay back a greater-than-expected 137 billion euros in loans next week, a sign of strength in the financial system, Reuters reported.

The kiwi was at 62.16 euro cents at 5pm, barely changed from 62.15 at 8am and 62.60 on Friday.

“European banks are repaying money because they don’t need it. They can get it cheaper elsewhere,” one dealer said.

The kiwi traded in a narrow range before settling at 83.59US cents at 5pm from 83.50 cents at 8am and 83.63 cents at 5pm on Friday.

While tensions are easing in Europe, the BNZ says they are stirring in New Zealand with respect to monetary policy.

“We expect Reserve Bank of New Zealand governor, Graeme Wheeler, to play things down the middle at Thursday’s official cash review, keeping the official cash rate at 2.50 percent and his rhetoric appropriately vague and open-ended.

“But, make no mistake, tensions are brewing,” BNZ strategists said.

There are lots to reasons to keep interest rates down as well as emerging trends that suggest they should rise.

“We suspect he will not want to shift market pricing to any material degree. As much as he’s not the dove Bollard was, nor does that make him an outright hawk. It’s all relative,” BNZ said.

They said the market may also learn more about Wheeler’s leanings when he delivers an on-the-record speech to the Canterbury Employers’ Chamber of Commerce on Friday.

“This customary new year address tends to deal with big-picture issues and trends.”

A fall in the performance of services index to 51.5 in December from 54.2 in November revealed today did not alter the broad outlook for economic growth.

Foreign exchange dealers are also monitoring the discovery of traces of Dicyandiamide, or DCD, in New Zealand milk products and say the next Fonterra milk powder auction will be interesting next Tuesday, Feb 5.

“While it is clearly something for the involved companies and government agencies to manage from a public relations perspective, our understanding is that it is not any genuine food safety concern,” BNZ said.

The kiwi was at 76.13 yen at 5pm from 75.67 yen at 5pm on Friday.

It was at 80.22 Australian cents from 80.08 cents on Friday and was at 53.06 British pence from 53.02 pence.

The trade-weighted index was at 75.34 from 75.42.

(BusinessDesk)

© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

Economic Update: RBNZ Says Rate Cut Seems Likely

The Reserve Bank will likely cut interest rates further as a persistently strong kiwi dollar makes it difficult for the bank to meet its inflation target, it said. The local currency fell. More>>

ALSO:

House Price Action Plan: RBNZ Signals National Lending Restrictions

The central bank wants to cap bank lending to property investors with a deposit of less than 40 percent at 5 percent and restore the 10 percent limit for owner-occupiers wanting to take out a mortgage with a deposit of less than 20 percent, according to a consultation paper released today. More>>

ALSO:

Sparks Fly: Gordon Campbell On China Steel Dumping Allegations

No doubt, officials on the China desk at MFAT have prided themselves on fashioning a niche position for New Zealand right in between the US and China – and leveraging off both of them! Well, as the Aussies would say, of MFAT: tell ‘em they’re dreaming. More>>

ALSO:

Loan Sharks: Finance Companies Found Guilty Of Breaching Fair Trading Act

Finance companies Budget Loans and Evolution Finance, run by former 1980s corporate high-flyer Allan Hawkins, have been found guilty of 106 charges of breaching the Fair Trading Act for misleading 21 borrowers while enforcing loan contracts. More>>

ALSO:

Post Panama Papers: Govt To Adopt Shewan's Foreign Trust Recommendations

The government will adopt all of the recommendations from former PwC chairman John Shewan to increase disclosure and introduce a register for foreign trusts with new legislation to be introduced next month. More>>

ALSO:

The Price Of Cheese: Cheddar At Eight-Year Low

Food prices decreased 0.5 percent in the year to June 2016, influenced by lower grocery food prices (down 2.3 percent), Statistics New Zealand said today. Compared with June 2015, cheese prices were down 9.5 percent, fresh milk was down 3.9 percent, and yoghurt was down 9.2 percent. More>>

ALSO:

Financial Advisers: New 'Customer-First' Obligations

Goldsmith plans to do away with the current adviser designations which he says have been "unsatisfactory" in that some advisers are obliged to disclose potential conflicts of interest and act in their customers' best interests, but others are not. More>>

ALSO:

Get More From Scoop

 
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news