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


NZ dollar TWI rises near record high as local economy shines

NZ dollar TWI climbs near record high as local economy shines

By Paul McBeth

Jan. 15 (BusinessDesk) - The New Zealand dollar closed in on last April’s record high on a trade-weighted basis as the local economy gathers momentum, fuelling expectations the Reserve Bank will have to hike interest rates to head off future inflation.

The trade-weighted index rose to 79.10 at 8am in Wellington from 78.82 yesterday, the highest since it hit a post-float record 79.39 in April last year. The kiwi was little changed at 83.77 US cents at 8am from 83.70 cents yesterday, having touched 84.32 cents in Northern Hemisphere trading, the highest since late October.

Traders are pricing in 116 basis points of increases to the 2.5 percent official cash rate over the coming 12 months, according to the Overnight Index Swap curve as local economic data shows New Zealand’s recovery is accelerating. Upbeat business confidence, retail sales, and property value figures yesterday added to the optimism view of the New Zealand’s economy.

“We had business confidence yesterday that was an exceptionally elevated level, the best in 20 years,” said Stuart Ive, senior adviser at OMF in Wellington. “Against the US dollar, the kiwi’s holding its own, and against everything else we’re reaching for the sky.”

OMF’s Ive said the Reserve Bank’s policy review at the end of the month will be closely watched to see whether governor Graeme Wheeler will hike interest rates early, and next week’s inflation data will be a key report informing that decision.

New Zealand’s December food price index is due for release today.

The momentum in the New Zealand economy has coincided with a slow-down across the Tasman, where the Reserve Bank of Australia has been cutting its key rate, and the kiwi climbed to a new five-year high of 93.71 Australian cents, trading at 93.53 cents at 8am from 92.60 cents yesterday.

Investors’ appetite for higher-yielding, or riskier, assets got a boost from better than expected US consumer spending figures, which helped propel stocks on Wall Street higher, and eroded some of the pessimism sparked by last Friday’s weak December jobs report.

The local currency climbed to 87.20 yen at 8am in Wellington from 86.53 yen yesterday, and was little changed at 61.27 euro cents from 61.25 cents yesterday. It edged lower to 50.95 British pence from 51.08 pence yesterday.


© Scoop Media

Business Headlines | Sci-Tech Headlines


Oceans: NOAA Declares Third Ever Global Coral Bleaching Event

As record ocean temperatures cause widespread coral bleaching across Hawaii, NOAA scientists confirm the same stressful conditions are expanding to the Caribbean and may last into the new year, prompting the declaration of the third global coral bleaching event ever on record. More>>

Scoop Business: A Decade Of Government Pre-Seed Investment

More publicly-funded science is being commercialised after a decade of government ‘pre-see’d investment, according to an independent review. More>>


Solid Energy: Plan To Shut Unprofitable Huntly East Mine

Solid Energy, the state-owned coal miner in voluntary administration, plans to shut down its unprofitable Huntly East mine and lay off 65 staff after deciding the site stands "no chance whatsoever" of finding a buyer. More>>


E Tū: Merger Creates NZ's Biggest Private Sector Union

E tū has been created by the merger of the Engineering, Printing and Manufacturing Union and Service and Food Workers’ Union. It represents more than 50,000 working New Zealanders in industries as diverse as aviation, construction, journalism, food manufacturing, mining and cleaning. More>>


Internet: NZ Govt Lifts Target Speeds For Rural Broadband

The government has lifted its expectations on faster broadband speeds for rural New Zealand as it targets increased spending on research and development in the country's information and communications technology sector, which it sees as a key driver for export growth. More>>


Banks: Westpac Keeps Core Government Transactions Contract

The local arm of Westpac Banking Corp has kept its contract with the New Zealand government to provide core transactions, but will have to share peripheral services with its rivals. More>>


Science Investment Plan: Universities Welcome Statement

Universities New Zealand has welcomed the National Statement of Science Investment released by the Government today... this is a critical document as it sets out the Government’s ten-year strategic direction that will guide future investment in New Zealand’s science system. More>>


Get More From Scoop

Search Scoop  
Powered by Vodafone
NZ independent news