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.

(BusinessDesk)

© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

Company Results: Air NZ Rides The Tourism Boom With Record Full-Year Earnings

Air New Zealand has ridden the tourism boom and staved off increased competition to deliver the best full-year earnings in its 76-year history. More>>

ALSO:

New PGP: Sheep Milk Industry Gets $12.6M Crown Funding

The Sheep - Horizon Three programme aims to develop "a market driven, end-to-end value chain generating annual revenues of between $200 million and $700 million by 2030," according to a joint statement. More>>

ALSO:

Half Full: Fonterra Raises Forecast Milk Price

Fonterra Co-operative Group Limited today increased its 2016/17 forecast Farmgate Milk Price by 50 cents to $4.75 per kgMS. When combined with the forecast earnings per share range for the 2017 financial year of 50 to 60 cents, the total payout available to farmers in the current season is forecast to be $5.25 to $5.35 before retentions. More>>

ALSO:

Keep Digging: Seabed Ironsands Miner TransTasman Tries Again

The first company to attempt to gain a resource consent to mine ironsands from the ocean floor in New Zealand's Exclusive Economic Zone has lodged a new application containing fresh scientific and other evidence it hopes will persuade regulators after their initial application was turned down in 2014. More>>

Wool Pulled: Duvets Sold As ‘Premium Alpaca’ Mostly Sheep’s Wool

Rotorua business Budge Collection Limited (Budge) and sole director, Sun Dong Kim, were convicted and fined a total of $71,250 in Auckland District Court after each pleading guilty to four charges of misrepresenting how much alpaca fibre was in their duvets. More>>

Reserve Bank: Labour Calls For Monetary Policy To Expand Goals

Labour's comments follow a speech today by RBNZ governor Graeme Wheeler in which Wheeler sought to answer critics who variously say he should stop lowering interest rates, lower them faster, or that inflation-targeting should no longer be the primary goal of the central bank's activities. More>>

ALSO:

BSA Extension And Sunday Morning Ads: Digital Convergence Bill Captures Online Content

Broadcasting Minister Amy Adams has today announced the Government’s plans to update the Broadcasting Act to better reflect today’s converged market... The Government considered four areas as part of its review into content regulation: classification requirements, advertising restrictions, election programming and contestable funding. More>>

ALSO:

Get More From Scoop

 
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news