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

 

Fund For PPP Plans: Govt Embraces Targeted Rates To Spur Urban Infrastructure

The government's latest response to the Auckland housing shortage will see central government and private sector firms invest in 'special purpose vehicles' to fund essential roading, water and drains that Auckland Council can't fund without threatening its credit rating. More>>

ALSO:

Superu Report: Land Regulation Drives Auckland House Prices

Land use regulation is responsible for up to 56 per cent of the cost of an average house in Auckland according to a new research report quantifying the impact of land use regulations, Finance Minister Steven Joyce says. More>>

ALSO:

Fletcher Whittled: Fletcher Dumps Adamson In Face Of Dissatisfaction

Fletcher Building has taken the unusual step of dumping its chief executive, Mark Adamson, as the company slashed its full-year earnings guidance and flagged an impairment against Australian assets. More>>

ALSO:

No More Dog Docking: New Animal Welfare Regulations Progressed

“These 46 regulations include stock transport, farm husbandry, companion and working animals, pigs, layer hens and the way animals are accounted for in research, testing and teaching.” More>>

ALSO:

Employment: Most Kiwifruit Contractors Breaking Law

A Labour Inspectorate operation targeting the kiwifruit industry in Bay of Plenty has found the majority of labour hire contractors are breaching their obligations as employers. More>>

ALSO: