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

 

Watch This Space: Mahia Rocket Lab Launch Site Officially Opened

Economic Development Minster Steven Joyce today opened New Zealand’s first orbital launch site, Rocket Lab Launch Complex 1, on the Mahia Peninsula on the North Island’s east coast. More>>

Earlier:

Marketing Rocks!
Ig Nobel Award Winners Assess The Personality Of Rocks

A Massey University marketing lecturer has received the 2016 Ig Nobel Prize for economics for a research project that asked university students to describe the “brand personalities” of three rocks. More>>

ALSO:

Nurofen Promotion: Reckitt Benckiser To Plead Guilty To Misleading Ads

Reckitt Benckiser (New Zealand) intends to plead guilty to charges of misleading consumers over the way it promoted a range of Nurofen products, the Commerce Commission says. More>>

ALSO:

Half A Billion Accounts, Including Xtra: Yahoo Confirms Huge Data Breach

The account information may have included names, email addresses, telephone numbers, dates of birth, hashed passwords (the vast majority with bcrypt) and, in some cases, encrypted or unencrypted security questions and answers. More>>

ALSO:

Rural Branches: Westpac To Close 19 Branches, ANZ Looks At 7

Westpac confirms it will close nineteen branches across the country; ANZ closes its Ngaruawahia branch and is consulting on plans to close six more branches; The bank workers union says many of its members are nervous about their futures and asking ... More>>

Interest Rates: RBNZ's Wheeler Keeps OCR At 2%

Reserve Bank governor Graeme Wheeler kept the official cash rate at 2 percent and said more easing will be needed to get inflation back within the target band. More>>

ALSO:

Get More From Scoop

 
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news