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

 

Half A Billion Accounts: Yahoo Confirms Huge Data Breach

The account information may have included names, email addresses, telephone numbers, dates of birth, hashed passwords (the vast majority with bcrypt) and, in some cases, encrypted or unencrypted security questions and answers. More>>

Rural Branches: Westpac To Close 19 Branches, ANZ Looks At 7

Westpac confirms it will close nineteen branches across the country; ANZ closes its Ngaruawahia branch and is consulting on plans to close six more branches; The bank workers union says many of its members are nervous about their futures and asking ... More>>

Interest Rates: RBNZ's Wheeler Keeps OCR At 2%

Reserve Bank governor Graeme Wheeler kept the official cash rate at 2 percent and said more easing will be needed to get inflation back within the target band. More>>

ALSO:

Half Full: Fonterra Raises Forecast Payout As Global Supply Shrinks

Fonterra Cooperative Group, the dairy processor which will announce annual earnings tomorrow, hiked its forecast payout to farmers by 50 cents per kilogram of milk solids as global supply continues to decline, helping prop up dairy prices. More>>

ALSO:

Results:

Meat Trade: Silver Fern Farms Gets Green Light For Shanghai Maling Deal

The government has given the green light for China's Shanghai Maling Aquarius to acquire half of Silver Fern Farms, New Zealand's biggest meat company, with ministers satisfied it will deliver "substantial and identifiable benefit". More>>

ALSO:

Get More From Scoop

 
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news