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

 


NZ dollar climbs to new 8-year high vs. Australian dollar

NZ dollar climbs to new 8-year high vs. Australian dollar as jobs data weighs on rate outlook

By Paul McBeth

Jan. 17 (BusinessDesk) - The New Zealand dollar climbed to a new eight-year high against its trans-Tasman counterpart after weak Australian jobs data highlighted the divergent interest rate outlooks between the neighbouring economies.

The kiwi rose as high as 94.80 Australian cents, trading at 94.72 cents at 8am from 94.45 cents yesterday. The local currency increased to 83.44 US cents from 83.29 cents yesterday.

Australian government figures showing a decline in full-time jobs in December prompted analysts to revisit their expectations the Reserve Bank of Australia might have to cut interest again having trimmed 50 basis points from its key rate last year. At the same time, New Zealand’s central bank is poised to start hiking interest rates as the local economy accelerates and inflation pressures start to creep in. Traders are betting the RBA will trim 3 basis points from its key rate over the coming 12 months, while the RBNZ is expected to hike by 118 basis points, according to the Overnight Index Swap curve.

“New Zealand is expected to be the first Western country to start raising interest rates – it’s going to happen but it’s tough for the Reserve Bank with the kiwi and TWI up here,” said Michael Johnston, senior dealer at HiFX in Auckland. The Australian employment data “increased the probability of another rate cut from the RBA, and that’s put upwards pressure on the kiwi/Aussie cross.”

New Zealand’s December quarter consumer price index is due next week, and Reserve Bank governor Graeme Wheeler will review monetary policy on Jan. 30. In December Wheeler said economic growth and increased consumer spending were offsetting the high currency, which had previously caused him to back away from higher rates.

HiFX’s Johnston said if the central bank’s loan restrictions on low equity mortgages show signs of biting that may keep him from hiking interest rates too early. Still, Wheeler will have to move at some point as an improving US economy will encourage the Federal Reserve to scale back its massive stimulus programme, which will strengthen the greenback.

The local currency slipped to 87.08 yen at 8am from 87.33 yen yesterday, and gained to 61.34 euro cents from 61.12 cents. It increased to 51.05 British pence from 50.85 pence yesterday. The trade-weighted index advanced to 79.23 from 79.09.

(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