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

 


NZ dollar hits more-than 2 yr high vs. Australian; RBA looms

NZ dollar hits more-than 2 year high vs. Australian as RBA meeting looms

By Paul McBeth

Feb. 4 (BusinessDesk) - The New Zealand dollar rose to a 2 ½-year high against the Australian dollar before the Reserve Bank of Australia’s monetary policy review tomorrow, while largely ignoring Prime Minister John Key’s comment that the kiwi is overvalued against the greenback.

The kiwi rose as high as 81.39 Australian cents, the highest since July 2010, and traded at 81.10 Australian cents at 5pm in Wellington from 81.22 cents on Friday in New York. The currency traded at 84.56 US cents at 5pm from 84.53 cents last week.

The RBA is expected to keep the target cash rate at 3 percent when the board reviews the benchmark rate tomorrow. That comes ahead of new forecasts, which may initiate a future cut if the projections show the world's 12th biggest economy is slowing down as its resources boom crests a peak.

"That cross-rate is very interest rate sensitive," said Peter Dragicevich, currency strategist at Commonwealth Bank of Australia in Sydney. "Expectations the RBA could do further policy easing will help the kiwi to outperform the Aussie in the near-term."

The RBA’s cash rate is 50 basis points higher than New Zealand's benchmark interest rate.

At his weekly post-Cabinet press conference, New Zealand PM Key, a former FX trader, said the kiwi is "a bit overvalued" against the greenback, "but the Australian dollar at 81 cents is not far out of the trading band."

New Zealand's Treasury department expects to see improved economic growth in the fourth quarter and first quarter, according to its latest monthly update. The domestic economy is expected to piggy-back on the Canterbury rebuild as it ramps up this year, and is also being supported by strong prices for raw materials.

The ANZ Commodity Price Index today showed locally produced raw materials attracted 10-month high prices, led by gains in pelts, logs and skim milk powder, rising 0.3 percent last month.

The kiwi dollar may extend its rally this week as investors continue to search out higher returns, with five strategists surveyed by BusinessDesk picking a bias to the topside of a 83.50 US cents to 85.50 cents trading range.

The local currency was almost unchanged at 78.39 yen from 78.38 yen on Friday in New York, and inched up to 62.02 euro cents from 61.97 cents. It traded at 53.87 British pence from 53.86 pence last week.

The trade-weighted index was at 76.16 at 5pm in Wellington from 76.13 last week.

(BusinessDesk)

© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

Half Empty: Fonterra's 2017 Opening Forecast Below Expectations

Fonterra Cooperative Group raised its forecast farmgate milk payout for next season by less than expected as the world's largest dairy exporter predicts lower prices will crimp production and supply will pick up. The New Zealand dollar fell. More>>

ALSO:

Pest Control: Mouse Blitz Team Leaves For Antipodes

The Million Dollar Mouse project to rid Antipodes Island of mice is underway with the departure of a rodent eradication team to the remote nature reserve and World Heritage Area. More>>

Gongs Got: Canon Media Awards & NZ Radio Awards Happen

Radio NZ: RNZ website The Wireless, which is co-funded by NZ On Air, was named best website, while Toby Manhire and Toby Morris won the best opinion general writing section for their weekly column on rnz.co.nz and Tess McClure won the best junior feature writer section. More>>

ALSO:

Pre-Budget: Debt Focus Risks Losing Opportunity To Stoke Economy

The Treasury is likely to upgrade its forecasts for economic growth in Budget 2016 next week but Finance Minister Bill English has already signalled that more of his focus is on debt repayment than on fiscal stimulus or tax cuts... More>>

ALSO:

Fulton Hogan's Heroes: Managing Director Nick Miller Resigns

Fulton Hogan managing director Nick Miller will leave the privately owned construction company after seven years in charge. The Dunedin-based company has kicked off a search for a replacement, and Miller will stay on at the helm until March next year, or until a successor has been appointed and a transition period completed. More>>

ALSO:

Gordon Campbell: On Electricity, Executions, And Bob Dylan

The Electricity Authority has unveiled the final version of its pricing plan for electricity transmission. This will change the way transmission prices (which comprise about 10% of the average power bill) are computed, and will add hundreds of dollars a year to power bills for many ordinary consumers. More>>

ALSO:

Half Empty: Fonterra NZ, Australia Milk Collection Drops In Season

Fonterra Cooperative Group says milk collection is down in New Zealand and Australia, its two largest markets, in the first 11 months of the season during a period of weak dairy prices. More>>

ALSO:

Get More From Scoop

 
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news