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

 


NZ dollar holds gains as rate hike talk grows

NZ dollar holds gains as business confidence, property values fuel rate hike expectations

By Paul McBeth

Jan. 14 (BusinessDesk) - The New Zealand dollar held gains in local trading as strong business confidence, increased consumer spending and rising property values fuelled expectations the Reserve Bank will hike interest rates to keep a lid on future inflation threats.

The kiwi traded at 83.70 US cents at 5pm in Wellington, little changed from 83.76 cents at 8am, and up from 83.31 cents yesterday. The trade-weighted index advanced to 78.82 from 78.41 yesterday.

Investors got more good news on the New Zealand economy today, with the New Zealand Institute of Economic Research reporting business confidence at a 20-year high, government figures showing increased retail spending on credit and debit cards in December, and Quotable Value data reporting a 10 percent increase in the country’s annual property values.

The upbeat data supported the Reserve Bank’s plans to lift interest rates this year, and traders are betting the official cash rate will rise 118 basis points over the coming 12 months, according to the Overnight Index Swap curve.

“There are plenty of reasons to be reasonably bullish the kiwi at the moment,” said Dan Bell, head of corporate sales at HiFX in Auckland. “We’re going to have one of the only central banks in the world raising rates.”

The local currency was a beneficiary as investors sold the greenback after weaker than expected US jobs data on Friday sapped expectations about the pace of the Federal Reserve’s plans to withdraw monetary stimulus.

The weakness in the December US employment figures has been put down the extreme winter conditions that month, and investors will get another steer on the strength of the world’s biggest economy when retail sales data is released on Tuesday in Washington.

The local currency rose to 86.53 yen at 5pm in Wellington from 86.20 yen yesterday, and gained to 92.60 Australian cents from 92.22 cents. It climbed to 61.25 euro cents from 60.92 cents yesterday, and gained to 51.08 British pence from 50.48 pence.

(BusinessDesk)

© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

Must Sell 20 Petrol Stations: Z Cleared To Buy Caltex Assets

Z Energy is allowed to buy the Caltex and Challenge! petrol station chains but must sell 19 of its retail sites and one truck-stop, the Commerce Commission has ruled in a split decision that acknowledges possible retail price coordination between fuel retailers occurs in some regions. More>>

ALSO:

Huntly: Genesis Extends Life Of Coal-Fuelled Power Station To 2022

Genesis Energy will keep its two coal and gas-fired units at Huntly Power Station operating until 2022, having previously said they'd be closed by 2018, after wringing a high price from other electricity generators who wanted to keep them as back-up. More>>

ALSO:

Dammed If You Do: Ruataniwha Irrigation Scheme Hits Farmer Uptake Targets

Enough Hawke's Bay farmers have signed up for water from the proposed Ruataniwha Water Storage Scheme for it to go ahead as long as a cornerstone institutional capital investor can be found to back it, its regional council promoter announced. More>>

ALSO:

Reserve Bank: OCR Stays At 2.25%

Reserve Bank governor Graeme Wheeler kept the official cash rate at 2.25 percent, in a decision traders had said could go either way, while predicting inflation will pick up as the slump in oil prices washes out of the data and capacity pressures start to build in the economy. More>>

ALSO:

Export Values Down: NZ Posts Biggest Annual Trade Deficit In 7 Years

New Zealand has recorded its biggest annual trade deficit since April 2009, reflecting weaker prices of agricultural commodities such as dairy products, beef and lamb, and increased imports of vehicles and machinery. More>>

ALSO:

Currency Events: NZ's New $5 Note Wins International Banknote Award

New Zealand’s new Brighter Money $5 note has been named Banknote of the Year in a prestigious international competition. The $5 note was awarded the IBNS Banknote of the Year title at the International Bank Note Society’s annual meeting. More>>

ALSO:

Get More From Scoop

 
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news