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

 

Sky City : Auckland Convention Centre Cost Jumps By A Fifth

SkyCity Entertainment Group, the casino and hotel operator, is in talks with the government on how to fund the increased cost of as much as $130 million to build an international convention centre in downtown Auckland, with further gambling concessions ruled out. The Auckland-based company has increased its estimate to build the centre to between $470 million and $530 million as the construction boom across the country drives up building costs and design changes add to the bill.
More>>

ALSO:

RMTU: Mediation Between Lyttelton Port And Union Fails

The Rail and Maritime Union (RMTU) has opted to continue its overtime ban indefinitely after mediation with the Lyttelton Port of Christchurch (LPC) failed to progress collective bargaining. More>>

Earlier:

Science Policy: Callaghan, NSC Funding Knocked In Submissions

Callaghan Innovation, which was last year allocated a budget of $566 million over four years to dish out research and development grants, and the National Science Challenges attracted criticism in submissions on the government’s draft national statement of science investment, with science funding largely seen as too fragmented. More>>

ALSO:

Scoop Business: Spark, Voda And Telstra To Lay New Trans-Tasman Cable

Spark New Zealand and Vodafone, New Zealand’s two dominant telecommunications providers, in partnership with Australian provider Telstra, will spend US$70 million building a trans-Tasman submarine cable to bolster broadband traffic between the neighbouring countries and the rest of the world. More>>

ALSO:

More:

Statistics: Current Account Deficit Widens

New Zealand's annual current account deficit was $6.1 billion (2.6 percent of GDP) for the year ended September 2014. This compares with a deficit of $5.8 billion (2.5 percent of GDP) for the year ended June 2014. More>>

ALSO:

Still In The Red: NZ Govt Shunts Out Surplus To 2016

The New Zealand government has pushed out its targeted return to surplus for a year as falling dairy prices and a low inflation environment has kept a lid on its rising tax take, but is still dangling a possible tax cut in 2017, the next election year and promising to try and achieve the surplus pledge on which it campaigned for election in September. More>>

ALSO:

Job Insecurity: Time For Jobs That Count In The Meat Industry

“Meat Workers face it all”, says Graham Cooke, Meat Workers Union National Secretary. “Seasonal work, dangerous jobs, casual and zero hours contracts, and increasing pressure on workers to join non-union individual agreements. More>>

ALSO:

Get More From Scoop

 
 
Standards New Zealand

Standards New Zealand
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news