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

 


NZ dollar gains as investors reassured on Chinese liquidity

NZ dollar gains as investors reassured about Chinese liquidity, growth

By Tina Morrison

June 26 (BusinessDesk) – The New Zealand dollar gained as investors were reassured China’s central bank would help ease a credit crunch that sparked concerns about growth in the world’s second-largest economy.

The kiwi edged up to 77.30 US cents from 77.16 cents at 5pm in Wellington yesterday. In the past 12 hours, the local currency has traded as low as 76.95 cents and as high as 77.95 cents. The trade-weighted index inched up to 72.91 from 72.79 yesterday.

The New Zealand dollar dropped yesterday as Asian stock markets fell and traders dumped risk-sensitive currencies on concern a tightening of banking liquidity by the People’s Bank of China would sap growth in the world’s second biggest economy. The kiwi then rebounded after China’s central bank said it had provided liquidity to some financial institutions to stabilise money-market rates, the first official signs of relief to ease a credit crunch.

“The Chinese stock market plunged 6 percent during our late afternoon then in the last hour of trading it completely reversed and closed slightly up for the day,” said Imre Speizer, senior currency strategist at Westpac Banking Corp. “The initial scare completely subsided, that helped things rebound a bit and then everything just went sideways. For the day, it can correct a bit higher.”

China is the world’s most-populous country and New Zealand’s second-largest export market.

New Zealand’s dollar has been on a downward path against the greenback since Federal Reserve chairman Ben Bernanke said last week the central bank may start winding back its US$85 billion a month asset purchase programme this year if economic data continues to improve.

In the US yesterday, economic figures provided evidence of further strength, as reports on durable goods orders, sales of new homes, home prices and consumer confidence all beat analysts’ expectations.

The Conference Board’s index of consumer confidence rose to 81.4 in June from 74.3 in May. Durable goods orders gained 3.6 percent last month, while sales of new homes increased more than forecast in May, climbing to the highest level in almost five years, and home prices rose more than forecast in the 12 months through April.

The New Zealand dollar may continue its decline, said Westpac’s Speizer. “It’s just a short-term correction and it shouldn’t last more than a few days,” he said.

The kiwi was little changed against the Australian dollar, recently trading at 83.44 Australian cents, from 83.47 cents yesterday. The local currency edged up to 75.58 yen from 75.23 yen, it rose to 59.05 euro cents from 58.83 cents and gained to 50.09 British pence from 49.98 pence.

(BusinessDesk)

© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

Tourism: China Southern Airlines To Fly To Christchurch

China Southern Airlines, in partnership with Christchurch Airport and the South Island tourism industry, has announced today it will begin flying directly between Guangzhou, Mainland China and the South Island. More>>

ALSO:

Dodgy: Truck Shops Come Under Scrutiny

Mobile traders, or truck shops, target poorer communities, particularly in Auckland, with non-compliant contracts, steep prices and often lower-quality goods than can be bought at ordinary shops, a Commerce Commission investigation has found. More>>

ALSO:

Auckland Transport: Government, Council Agree On Funding Approach

The government and Auckland Council have reached a detente over transport funding, establishing a one-year, collaborative timetable for decisions on funding for the city's transport infrastructure growth in the next 30 years after the government refused to fund the $2 billion of short and medium-term plans outlined in Auckland's draft Unitary Plan. More>>

ALSO:

Bullish On China Shock: Slumping Equities, Commodities May Continue, But Not A GFC

The biggest selloff in stock markets in at least four years, slumping commodity prices and a surge in Wall Street's fear gauge don't mean the world economy is heading for another global financial crisis, fund managers say. More>>

ALSO:

Real Estate: Investors Driving Up Auckland Housing Risk - RBNZ

The growing presence of investors in Auckland's property market is increasing the risks, and is likely to both amplify the housing cycle and worsen the potential damage from a downturn both to the financial system and the broader economy, said Reserve Bank deputy governor Grant Spencer. More>>

ALSO:

Annual Record: Overseas Visitors Hit 3 Million Milestone

Visitor arrivals to New Zealand surpassed 3 million for the first time in the July 2015 year, Statistics New Zealand said today. The record-breaking 3,002,982 visitors this year was 7 percent higher than the July 2014 year. More>>

ALSO:

Get More From Scoop

 
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news