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


NZ dollar heads for 1.2 percent weekly gain vs. Aussie

NZ dollar heads for 1.2 percent weekly gain vs. Aussie as interest rates diverge

By Paul McBeth

Dec. 13 (BusinessDesk) - The New Zealand dollar is heading for a 1.1 percent weekly gain against its Australian counterpart as the differing fortunes for the neighbouring economies underscore the divergent track for each country’s interest rates.

The kiwi rose as high as 92.46 Australian cents this week, a new five-year high, trading at 92.01 cents at 5pm in Wellington from 90.95 cents at the start of the week, and 91.63 cents yesterday. It was little changed at 82.37 US cents at 5pm from 82.43 cent at 8am and down from 82.67 cents yesterday.

New Zealand central bank governor Graeme Wheeler yesterday firmed up the prospect of interest rate hikes next year, saying the bank’s forecasts indicate the 2.5 percent official cash rate will be raised by 2.25 percentage points over the next two-and-a-quarter years to head off inflationary pressures. At the same time, Australia’s dollar came under pressure as Reserve Bank governor Glenn Stevens said a weaker currency was preferable to lower interest rates to inject life into a sagging economy.

The different stances by the respective central banks underline the view New Zealand’s key rate will soon be higher than in Australia. The yield on New Zealand 10-year government bonds was 4.87 percent at 5pm in Wellington, 53 basis points higher than its Australian equivalent.

“Interest rates have as good as priced in an awful lot of action for next year,” said Chris Tennent-Brown, FX economist at Commonwealth Bank of Australia in Sydney. “That’s going to keep it pretty strong, and it could go even stronger when they actually deliver” a rate hike, he said.

The kiwi dollar is heading for a 0.5 percent weekly decline against the US dollar, opening at 82.81 US cents on Monday, with investors waiting for next week’s Federal Reserve policy review for a steer on when the central bank intends to scale back its asset purchases.

A BusinessDesk survey of 11 traders and strategists on Monday predicted the local currency would trade between 80.80 US cents and 84.50 cents this week. Nine expected the currency to advance while two said it might drop.

The local currency was little changed at 59.88 euro cents at 5pm in Wellington from 59.92 cents yesterday and slipped to 50.37 British pence from 50.52 pence. It advanced to 85.49 yen from 84.73 yen yesterday. The trade-weighted index was at 77.65 from 77.59 yesterday.


© Scoop Media

Business Headlines | Sci-Tech Headlines


Power Outages, Roads Close: Easter Storm Moving Down Country

The NZ Transport Agency says storm conditions at the start of the Easter break are making driving hazardous in Auckland and Northland and it advises people extreme care is needed on the regions’ state highways and roads... More>>


Houses (& Tobacco) Lead Inflation: CPI Up 0.3% In March Quarter

The consumers price index (CPI) rose 0.3 percent in the March 2014 quarter, Statistics New Zealand said today. Higher tobacco and housing prices were partly countered by seasonally cheaper international air fares, vegetables, and package holidays. More>>


Notoriously Reliable Predictions: Budget To Show Rise In Full-Time Income To 2018: English

This year’s Budget will forecast wage increases through to 2018 amounting to a $10,500 a year increase in average full time earnings over six years to $62,200 a year, says Finance Minister Bill English in a speech urging voters not to “put all of this at risk” by changing the government. More>>


Prices Up, Volume Down: March NZ House Sales Drop 10% As Loan Curbs Bite

New Zealand house sales dropped 10 percent in March from a year earlier as the Reserve Bank’s restrictions on low-equity mortgages continue to weigh on sales of cheaper property. More>>


Scoop Business: Chorus To Appeal Copper Pricing Judgment

Chorus will appeal a High Court ruling upholding the Commerce Commission’s determination setting the regulated prices on the telecommunications network operator’s copper lines. More>>



Cars: Precautionary Recalls Announced For Toyota Vehicles

Toyota advises that a number of its New Zealand vehicles are affected by a series of precautionary global recalls. Toyota New Zealand General Manager Customer Services Spencer Morris stressed that the recalls are precautionary. More>>


'Gardening Club': Air Freight Cartel Nets Almost $12 Million In Penalties

The High Court in Auckland has today ordered Swiss company Kuehne + Nagel International AG to pay a penalty of $3.1 million plus costs for breaches of the Commerce Act. Kuehne + Nagel’s penalty brings the total penalties ordered in this case to $11.95 million ... More>>


Crown Accounts: Revenue Below Projections

Core Crown tax revenue has increased by $1.9 billion (or 5.0%) compared to the same time last year. However this was $1.1 billion less than expected and is reflected across most tax types, continuing the pattern of recent months. More>>


Get More From Scoop

Computer Power Plus
Search Scoop  
Powered by Vodafone
NZ independent news