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

 

Fruitful Endeavours: Kiwifruit Exports Reach Record Levels

In June 2016, kiwifruit exports rose $105 million (47 percent) from June 2015 to reach $331 million, Statistics New Zealand said today. Overall, goods exports rose $109 million (2.6 percent) in June 2016 (to $4.3 billion). More>>

ALSO:

Economic Update: RBNZ Says Rate Cut Seems Likely

The Reserve Bank will likely cut interest rates further as a persistently strong kiwi dollar makes it difficult for the bank to meet its inflation target, it said. The local currency fell. More>>

ALSO:

House Price Action Plan: RBNZ Signals National Lending Restrictions

The central bank wants to cap bank lending to property investors with a deposit of less than 40 percent at 5 percent and restore the 10 percent limit for owner-occupiers wanting to take out a mortgage with a deposit of less than 20 percent, according to a consultation paper released today. More>>

ALSO:

Sparks Fly: Gordon Campbell On China Steel Dumping Allegations

No doubt, officials on the China desk at MFAT have prided themselves on fashioning a niche position for New Zealand right in between the US and China – and leveraging off both of them! Well, as the Aussies would say, of MFAT: tell ‘em they’re dreaming. More>>

ALSO:

Loan Sharks: Finance Companies Found Guilty Of Breaching Fair Trading Act

Finance companies Budget Loans and Evolution Finance, run by former 1980s corporate high-flyer Allan Hawkins, have been found guilty of 106 charges of breaching the Fair Trading Act for misleading 21 borrowers while enforcing loan contracts. More>>

ALSO:

Post Panama Papers: Govt To Adopt Shewan's Foreign Trust Recommendations

The government will adopt all of the recommendations from former PwC chairman John Shewan to increase disclosure and introduce a register for foreign trusts with new legislation to be introduced next month. More>>

ALSO:

Get More From Scoop

 
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news