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

 


NZ dollar gains vs. Aust after RBA leaves rates unchanged

NZ dollar gains vs. Aust after RBA leaves rates unchanged

By Paul McBeth

Feb. 5 (BusinessDesk) - The New Zealand gained against its Australian counterpart after the Reserve Bank of Australia kept interest rates on hold, while leaving a future cut on the table if slowing growth and inflation get out of hand.

The kiwi rose to 80.88 Australian cents at 5pm in Wellington from 80.66 cents immediately before the announcement, and down from 81.10 cents yesterday. The kiwi fell to 84.12 US cents from 84.46 cents at 8am and 84.55 cents yesterday.

The RBA kept the target cash rate at 3 percent today, with governor Glenn Stevens saying "substantial easing" through last year meant the board didn't need to cut further. Still, the central bank will "assess the outlook and adjust policy as needed to foster sustainable growth in demand and inflation outcomes consistent with the target over time," Stevens said. The RBA will update its economic forecasts later this week.

"It's negative for the Aussie by leaving the door open for a cut in March," said Imre Speizer, market strategist at Westpac Banking in Auckland. "The kiwi/Aussie cross may have another leg to it."

Speizer sees the kiwi rising to at least 82.60 Australian cents this year as the trans-Tasman economies trade places, with the New Zealand's recovery underpinned by the Canterbury rebuild and Auckland housing boom and the end of Australia's mining boom coming into view.

Adding to the lustre of New Zealand as an investment destination is its relatively high returns. The yield on New Zealand's 10-year government bond was 3.8 percent as at 5pm in Wellington, 29 basis points above its Australian equivalent.

Investors largely ignored New Zealand employment data showing a 0.5 percent increase in wage costs in the December quarter. That comes ahead of the household labour force survey on Thursday, which is expected to show a headline unemployment rate of 7 percent.

The kiwi dollar fell to 77.68 yen from 78.40 yen yesterday, and climbed to 62.35 euro cents from 62.03 cents. It declined to 53.40 British pence from 53.85 pence yesterday, and the trade-weighted index slipped to 75.95 from 76.16.

(BusinessDesk)

© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

Oceans: NZ Jumps Into International Shark Agreement

New Zealand has boosted the protection of sharks by signing the Memorandum of Understanding on the Conservation of Migratory Sharks. More>>

ALSO:

Insurance: EQC To Double Payout, Scrap Contents Insurance

New Zealand’s Earthquake Commission may double its payout amount, scrap contents insurance and process claims through private insurers under the government’s long-running review of funding and management of the state-run earthquake insurer. More>>

ALSO:

Gordon Campbell: On Tiwai Point (And Saying “No” In Greece)

Its hard to see how Rio Tinto’s one month delay in announcing its intentions about the Tiwai Point aluminium smelter is a good sign for (a) the jobs of the workers affected or (b) for the New Zealand taxpayer. More>>

ALSO:

Get More From Scoop

 
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news