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


NZ dollar rises to 3-week high vs. Aussie

NZ dollar rises to 3-week high vs. Aussie as investors bet kiwi will outperform

By Tina Morrison

Jan. 8 (BusinessDesk) – The New Zealand dollar rose to a three-week high against the Australian dollar overnight as investors bet the fundamentals for the kiwi are more favourable than for its Australian counterpart this year.

The kiwi touched 92.98 Australian cents overnight and was trading at 92.76 cents at 8am in Wellington, from 92.50 cents at 5pm yesterday. The local currency edged up to 82.77 US cents from 82.62 cents yesterday.

The New Zealand dollar has advanced 16 percent against the Aussie the past year as a reviving local economy contrasts with a slowdown in Australia, increasing the yield appeal of local assets. New Zealand’s Reserve Bank is expected to raise interest rates as early as this month while Australia could cut rates this year, prompting investors to place so called “long” bets on the kiwi, anticipating it will rise against the Aussie.

“Offshore fund managers put on some of their bets for the year in the first week in January, so obviously long kiwi short Aussie is still going to be the preferred trade at this stage,” said Tim Kelleher, head of institutional FX sales New Zealand at ASB Bank. “We are definitely seeing demand for New Zealand fixed income in the first week of January already from offshore. We are outperforming.”

ASB’s Kelleher expects the cross rate to push higher towards 93.50 to 94 Australian cents ahead of the Reserve Bank of New Zealand interest rate decision on Jan. 30.

Traders anticipate there is a 44 percent chance New Zealand’s Reserve Bank will raise its 2.5 percent benchmark interest rate at this month’s meeting, according to the Overnight Index Swap Curve.

A report early this morning showed dairy product prices fell 0.8 percent in the first GlobalDairyTrade auction for 2014, led by skim milk powder while rennet casein made a new record high.

Despite the fall, dairy prices remain highly elevated from year ago levels and New Zealand commodity prices continue to provide support for the New Zealand dollar, Kymberly Martin, markets strategist at Bank of New Zealand, said in a note.

Today, the focus will be on the US with the release of the minutes from the Federal Reserve’s meeting last month and the latest ADP private sector employment report.

The New Zealand dollar slipped to a four-day low of 60.56 euro cents overnight after a report showed core Eurozone inflation remains weak at 0.7 percent. The kiwi was trading at 60.78 euro cents at 8am from 60.63 cents at 5pm yesterday ahead of reports today on Eurozone retail sales and unemployment.

The local currency advanced to 50.43 British pence from 50.38 pence yesterday and rose to 86.50 yen from 86.37 yen. The trade-weighted index rose to 78.35 from 78.19 yesterday.


© Scoop Media

Business Headlines | Sci-Tech Headlines


Postnatal Depression: 'The Thief That Steals Motherhood' - Alison McCulloch

Post-natal depression is a sly and cruel illness, described by one expert as ‘the thief that steals motherhood’, it creeps up on its victims, hiding behind the stress and exhaustion of being a new parent, catching many women unaware and unprepared. More>>


DIY: Kiwi Ingenuity And Masking Tape Saves Chick

Kiwi ingenuity and masking tape has saved a Kiwi chick after its egg was badly damaged endangering the chick's life. The egg was delivered to Kiwi Encounter at Rainbow Springs in Rotorua 14 days ago by a DOC worker with a large hole in its shell and against all odds has just successfully hatched. More>>


Trade: Key To Lead Mission To India; ASEAN FTA Review Announced

Prime Minister John Key will lead a trade delegation to India next week, saying the pursuit of a free trade agreement with the protectionist giant is "the primary reason we're going" but playing down the likelihood of early progress. More>>



MYOB: Digital Signatures Go Live

From today, Inland Revenue will begin accepting “digital signatures”, saving businesses and their accountants a huge amount of administration time and further reducing the need for pen and paper in the workplace. More>>

Oil Searches: Norway's Statoil Quits Reinga Basin

Statoil, the Norwegian state-owned oil company, has given up oil and gas exploration in Northland's Reinga Basin, saying the probably of a find was 'too low'. More>>


Modern Living: Auckland Development Blowouts Reminiscent Of Run Up To GFC

The collapse of property developments in Auckland is "almost groundhog day" to the run-up of the global financial crisis in 2007/2008 as banks refuse to fund projects due to blowouts in construction and labour costs, says John Kensington, the author of KPMG's Financial Institutions Performance Survey. More>>


Health: New Zealand's First ‘No Sugary Drinks’ Logo Unveiled

New Zealand’s first “no sugary drinks logo” has been unveiled at an event in Wellington... It will empower communities around New Zealand to lift their health and wellbeing and send a clear message about the damage caused by too much sugar in our diets. More>>


Get More From Scoop

Search Scoop  
Powered by Vodafone
NZ independent news