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

 


NZ Dollar Outlook: Kiwi may extend gains before payrolls

NZ Dollar Outlook: Kiwi may extend gains ahead of US payrolls data

By Tina Morrison

Jan. 6 (BusinessDesk) – The New Zealand dollar will probably continue its upward momentum this week on the back of a positive economic outlook.

The local currency may trade between 81.20 US cents and 84.50 cents this week, according to a BusinessDesk survey of 11 traders and strategists. Nine expect the currency to rise while one says it will be unchanged and one expects a decline. The kiwi recently traded at 82.69 US cents from 82.81 cents at 8am in Wellington.

Positive momentum in the New Zealand economy means the nation’s central bank is tipped to be the first in the OECD to raise interest rates this year, increasing the lure of the local currency. While other countries grapple with how to wind back their unprecedented money-printing programmes, New Zealand is expected to increase rates as early as this month.

“Coming into the New Year, risk appetite is pretty solid which is always a good thing for the kiwi,” said Kymberly Martin, market strategist at Bank of New Zealand. “On the domestic front, we have come in to the New Year and things are still look pretty positive and there is not going to be anything within the coming week that is going to change that view.”

The kiwi is likely to drift higher leading into the key US non-farm payrolls report on Friday, Martin said.

Reuters polling suggests US employers added 193,000 workers to payrolls last month, while Bloomberg surveys point to an additional 195,000.

A significantly higher number could boost confidence in the US economic expansion and increase expectations for the Federal Reserve’s plan to pull back on its monetary stimulus programme, said the BNZ’s Martin.

The Fed is planning to reduce its US$85 billion a month bond-buying programme by $10 billion starting this month. A reduction in the programme supports the greenback because it reduces the amount of US dollars in circulation, boosting its value.

The Fed will release the minutes of its Dec. 17-18 meeting on Wednesday. However markets are paying more attention to data releases than commentary given there is so much rhetoric from Fed speakers which is often contradictory, Martin said.

The US Senate is expected to confirm today that Janet Yellen will succeed Fed chairman Ben Bernanke.

No change in rates is expected following central bank meetings in Europe and England on Thursday although traders will be eyeing comments from European Central Bank president Mario Draghi in anticipation the region may require further stimulus in 2014, Martin said.

Reports from China will be closely watched this week as traders view Asia’s largest economy as one of the bigger risks for 2014, Martin said.

China publishes its December export data on Wednesday and inflation data on Thursday.

In Australia, trade and building approval data are likely to be overlooked in favour of November retail sales figures on Thursday, although given the historic nature of the data it would have to be a significant surprise to move markets, Martin said.

New Zealand has the first GlobalDairyTrade auction of 2014 on Wednesday and building consent figures for November on Thursday.

(BusinessDesk)

© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

Half Full: Dairy Payouts Steady, Cash Will Be Tight

Industry body DairyNZ is advising farmers to focus on strong cashflow management as they look ahead to the 2015-16 season following Fonterra's half-year results announcement today. More>>

ALSO:

First Union: Cotton On Plans To Use “Tea Break” Law

“The Prime Minister reassured New Zealanders that ‘post the passing of this law, will you all of a sudden find thousands of workers who are denied having a tea break? The answer is absolutely not’... Cotton On is proposing to remove tea and meal breaks for workers in its safety sensitive distribution centre. How long before other major chains try and follow suit?” More>>

ALSO:

Scoop Business: NZ-Korea FTA Signed Amid Spying, Lost Sovereignty Claims

A long-awaited free trade agreement between New Zealand and South Korea has been signed in Seoul by Prime Minister John Key and the Korean president, Park Geun-hye. More>>

ALSO:

PM Visit: NZ And Viet Nam Agree Ambitious Trade Target

New Zealand and Viet Nam have agreed an ambitious target of doubling two-way goods and service trade to around $2.2 billion by 2020, Prime Minister John Key has announced. More>>

ALSO:

Scoop Business: NZ Economy Grows 0.8% In Fourth Quarter

The New Zealand economy expanded in the fourth quarter as tourists drove growth in retailing and accommodation, and property sales increased demand for real estate services. More>>

ALSO:

Scoop Business: RBNZ’s Wheeler Keeps OCR On Hold, No Rate Hikes Ahead

The Reserve Bank has removed the prospect of future interest rate hikes from its forecast horizon as a strong kiwi dollar and cheap oil hold down inflation, and the central bank ponders whether to lower its assessment of where “neutral” interest rates should be. The kiwi dollar gained. More>>

ALSO:

Get More From Scoop

 
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news