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.

(BusinessDesk)

© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

Insurance: EQC To Double Payout, Scrap Contents Insurance

New Zealand’s Earthquake Commission may double its payout amount, scrap contents insurance and process claims through private insurers under the government’s long-running review of funding and management of the state-run earthquake insurer. More>>

ALSO:

Gordon Campbell: On Tiwai Point (And Saying “No” In Greece)

Its hard to see how Rio Tinto’s one month delay in announcing its intentions about the Tiwai Point aluminium smelter is a good sign for (a) the jobs of the workers affected or (b) for the New Zealand taxpayer. More>>

ALSO:

Half Empty: Dairy Product Prices Extend Slide To Six-Year Low

Dairy product prices continued their slide, paced by whole milk power, in the latest GlobalDairyTrade auction, weakening to the lowest level in six years. More>>

ALSO:

Copper Broadband: Regulator Set To Keep Chorus Pricing Largely Unchanged

The Commerce Commission looks likely to settle on a price close to its original decision on what telecommunications network operator Chorus can charge its customers, though it probably won’t backdate any update. More>>

ALSO:

Lower Levy For Safer Cars: ACC Backtracks On Safety Assessments

Dog and Lemon: “The ACC has based the entire levy system on a set of badly flawed data from Monash University. This Monash data is riddled with errors and false assumptions; that’s the real reason for the multiple mistakes in setting ACC levies.” More>>

ALSO:

Fast Track: TPP Negotiations Set To Accelerate, Groser Says

Negotiations for the Trans-Pacific Partnership will accelerate in July, with New Zealand officials working to stitch up a deal by the month's end, according to Trade Minister Tim Groser. More>>

ALSO:

Get More From Scoop

 
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news