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

 


NZ dollar may fall in 1st quarter, BusinessDesk survey says

NZ dollar may weaken in first quarter, offering relief to onion growers, seasonal exporters

By Tina Morrison

Jan. 7 (BusinessDesk) – The New Zealand dollar may weaken in the first quarter of 2014, benefiting seasonal commodity exporters gearing up for the harvest, such as onion growers.

The kiwi, which recently traded at 82.88 US cents, is likely to slip to 81.50 cents by the end of March, according to the median forecast of 11 currency traders and strategists in BusinessDesk’s quarterly survey of the New Zealand dollar.

Many onion exporters are taking forward cover now to fix currency rates for their overseas sales, which amount to about $90 million a year, making the vegetable New Zealand’s third-largest horticultural export crop behind kiwifruit and apples. A stronger New Zealand currency has hurt sales of onions, 85 percent of which are exported.

“The New Zealand dollar has been overvalued by our view of the world for the past 10 years and it has made life pretty hard going,” said Michael Ahern, chairman of industry body Onions New Zealand. “We think we have done a pretty good job standing still and are quite match fit now. Should the currency move in our favour that would probably go straight to the bottom line.”

About 45 percent of onion exports are sold in euros, 5-10 percent in yen, 5-10 percent in British pounds and the remainder in US dollars, with freight also paid in US dollars, Ahern said.

While early varieties of onions have already been lifted out of the ground to dry, the main seasonal thrust starts later this week heading into the packing and shipping period from early February with sales continuing through to the end of July.

The New Zealand dollar is predicted to decline in the first quarter on the expectation markets have already priced in local interest rate hikes and as a reduction in the Federal Reserve’s stimulus programme boosts the greenback against most major currencies.

Expectations for the New Zealand dollar at the end of the quarter range from 78 US cents to 84 cents, according to the BusinessDesk survey taken Dec. 19-20.

The kiwi, which recently traded at 92.44 Australian cents, will probably edge lower to 92 cents by the end of the quarter, according to the median of 11 forecasts in the survey. Expectations range from 90 cents to 94.30 cents.

The survey shows the trade-weighted index, which tracks the New Zealand currency against those of Australia, Japan, the US, the UK and the euro area, will likely be at 78 from 78.32 currently. Expectations in the BusinessDesk survey range from 73.5 to 80. That compares with the Reserve Bank’s expectation for the TWI to average 77.4 over the quarter, according to its latest forecast published Dec. 12.

(BusinessDesk)

© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

Maritime: Navigation Safety Review Raises Big Issues For The Govt

Shipping Federation: "The reports makes it clear that the ratification of the Maritime Labour convention (MLC) is long overdue. Only when the MLC is ratified will Maritime NZ be able to inspect and enforce the labour conditions on international ships visiting our ports." More>>

ALSO:

100 Years After Einstein Prediction: Gravitational Waves Found

For the first time, scientists have observed ripples in the fabric of spacetime called gravitational waves, arriving at the earth from a cataclysmic event in the distant universe. This confirms a major prediction of Albert Einstein’s 1915 general theory of relativity and opens an unprecedented new window onto the cosmos. More>>

ALSO:

Farming: Alliance Plans To Start Docking Farmer Payments

Alliance Group, New Zealand's second-largest meat cooperative, plans to start withholding some stock payments to its farmers from next week to bolster its balance sheet and force suppliers to meet their share requirements. More>>

ALSO:

Gambling: SkyCity First Half Profit Rises 30%, Helped By High Rollers

SkyCity anticipates the Auckland business will benefit from government gaming concessions which were triggered on Nov. 11 in recognition of SkyCity’s $470 million Convention Centre development. Morrison said the concessions would allow the Auckland business to lift its activity during peak period, noting it had a record revenue week over the Christmas and New Year period. More>>

ALSO:

Money For Light: Kiwi Scientists Secure Preferential Access To Synchrotron

Science and Innovation Minister Steven Joyce today announced a three-year investment of $2.8 million in the Australian Synchrotron, the largest piece of scientific infrastructure in the Southern Hemisphere, to secure preferential access for Kiwi scientists. More>>

Telco Industry Report: Investment Hits $1.7 Bln A Year

Investment in the telecommunications sector is $1.7 billion a year, proportionately one of the highest levels in the OECD, according to a report released today on the status of the New Zealand sector. More>>

ALSO:

PGPs: New Programme Sets Sights On Strong Wool

A new collaboration between The New Zealand Merino Company (NZM) and the Ministry for Primary Industries (MPI), announced today, aims to deliver premiums for New Zealand's strong wool sector... More>>

ALSO:

Get More From Scoop

 
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news