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

 


NZ dollar climbs above 83 Aust cts for 1st time since Oct 09

NZ dollar climbs above 83 Aust cts for 1st time since Oct 2009 ahead of RBA meeting

By Paul McBeth

May 3 (BusinessDesk) - The New Zealand dollar climbed above 83 Australian cents for the first time since October 2009 as investors look for increasing returns on this side of the Ditch ahead of next week's Australian central bank.

The kiwi climbed to 83.02 Australian cents at 5pm in Wellington, near its 83.08 cents high, from 82.86 cents yesterday. The local currency gained to 85.22 US cents from 84.92 cents at 8am and 84.90 cents yesterday.

Investors have become more attracted to yields on offer in New Zealand as the local economic recovery gathers pace and as the Reserve Bank looks more likely to hike interest rates over the next year. The yield on the New Zealand 10-year government bond was 3.18 percent at 5pm in Wellington, 13 basis points above its Australian equivalent, even though Australia's target cash rate is higher than New Zealand's.

The Reserve Bank of Australia will review monetary policy next week, and traders are increasingly expecting a rate cut some time this year, with 62 basis points of reductions priced in over the coming 12 months, according to the Overnight Index Swap curve. That compares to pricing of 9 basis points of increases for the New Zealand central bank over the same time frame.

"A rate cut is starting to get more priced in, and from a commodity price point of view, agriculture and food prices have held up remarkably well" which benefits New Zealand's exports more than Australia, said Dan Bell, currency strategist at HiFX in Auckland. "The kiwi/Aussie cross rate has been in an uptrend for a while and is reversing a lot of the losses it's had over the last few years."

Investors are waiting for US employment figures in Washington on Friday, which are expected to show the world's biggest economy added about 140,000 jobs last month.

The local currency is heading for 0.6 percent weekly gain against the greenback. A BusinessDesk survey of strategists on Monday predicted it would trade between 83 US cents and 86 cents this week and was more likely to test the bottom of that range.

The kiwi rose to 65.18 euro cents from 64.46 cents yesterday after the European Central Bank cut its deposit rate a quarter-point to 0.5 percent as expected, and left the door open for further reductions.

The local currency rose to 54.88 British pence from 54.62 pence yesterday, and advanced to 83.51 yen from 82.57 yen. The trade-weighted index gained to 78.57 from 78.09 yesterday, and is heading for a 0.2 percent weekly decline.

(BusinessDesk)

© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

Scoop Business: Leighton-Led WGP To Build, Manage Transmission Gully

The Wellington Gateway Partnership, led by a unit of ASX-listed Leighton Holdings, has won the $1 billion contract to build the Transmission Gully road north of Wellington. More>>

ALSO:

Gareth Morgan: The Government’s Fresh Water Policy – Revisited

Fresh water quality is the latest area to be in the sights of Gareth Morgan and his research organisation The Morgan Foundation... They found that the fresh water policy was a bit murkier than the Environment Minister let on. More>>

ALSO:

Interest Rates: RBNZ Hikes OCR To 3.5%, ‘Period Of Assessment’ Now Needed

Reserve Bank governor Graeme Wheeler raised the official cash rate as expected, while signalling a pause in rate hikes to assess the impact of moves so far this year. The kiwi dollar sank after Wheeler said its strength was “unjustified” and that the currency could have “a significant fall.” More>>

ALSO:

Fonterra: Canpac Site 'Resize' To Focus More On Paediatrics

Fonterra is looking at realigning its packing operations at Canpac, in the Waikato, to focus more on paediatric nutritionals... The proposed changes could mean around 110 roles may not be required at the site which currently employs 330. More>>

ALSO:

Scoop Business: Postie Plus Brand Gets 2nd Chance With Well-Funded Pepkor

The Postie Plus brand is getting a new lease of life after South Africa’s Pepkor bought the failed retailer’s assets out of administration and said it will use its purchasing power to reduce costs of stock and fatten margins. More>>

ALSO:

Warming: Warming Signs From State Of Climate Report

Climate data from air, land, sea and ice in 2013 'reflect trends of a warming planet' -- says the latest State of the Climate report, launched by U.S. and New Zealand scientists. More>>

ALSO:

Get More From Scoop

 
 
Computer Power Plus

Standards New Zealand

Standards New Zealand
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news