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

 

Scoop Business: RBNZ Keeps OCR At 3.5%, Signals Slower Pace Of Future Hikes

Reserve Bank governor Graeme Wheeler kept the official cash rate at 3.5 percent and signalled he won’t be as aggressive with future rate hikes as previously thought as inflation remains tamer than expected. The kiwi dollar fell to a seven-month low. More>>

ALSO:

Weather: Dry Spells Take Hold In South Island

Many areas in the South Island are tracking towards record dry spells as relatively warm, dry weather that began in mid-August continues... for some South Island places, the current period of fine weather is quite rare. More>>

ALSO:

Scoop Business: Productivity Commission To Look At Housing Land Supply

The Productivity Commission is to expand on its housing affordability report with an investigation into improving land supply and development capacity, particularly in areas with strong population growth. More>>

ALSO:

Forestry: Man Charged After 2013 Death

Levin Police have arrested and charged a man with manslaughter in relation to the death of Lincoln Kidd who was killed during a tree felling operation on 19 December 2013. More>>

ALSO:

Smells Like Justice: Dairy Company Fined Over Odour

Dairy company fined over odour Dairy supply company Open Country Dairy Limited has been convicted and fined more than $35,000 for discharging objectionable odour from its Waharoa factory at the time of last year’s ”spring flush” when milk supply was high. More>>

Scoop Business: Dairy Product Prices Decline To Lowest Since July 2012

Dairy product prices dropped to the lowest level since July 2012 in the latest GlobalDairyTrade auction, led by a slump in rennet casein and butter milk powder. More>>

ALSO:

SOE Results: TVNZ Lifts Annual Profit 25% On Flat Ad Revenue, Quits Igloo

Television New Zealand, the state-owned broadcaster, lifted annual profit 25 percent, ahead of forecast and despite a dip in advertising revenue, while quitting its stake in the pay-TV Igloo joint venture with Sky Network Television. More>>

ALSO:

Get More From Scoop

 
 
Computer Power Plus

Standards New Zealand

Standards New Zealand

Mosh Social Media
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news