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

 


NZ dollar gains after inflation ups rate hike chance

NZ dollar gains after inflation data fuels appetite for early rate hike

By Paul McBeth

Jan. 21 (BusinessDesk) - The New Zealand dollar rose after an unexpected lift in inflation in the December quarter raised the chance of the Reserve Bank hiking interest rates as early as next week.

The kiwi rose to 83.21 US cents at 5pm in Wellington from 82.61 cents at 8am and 82.43 cents yesterday. The trade-weighted index advanced to 79.09 from 78.37 yesterday.

New Zealand’s consumers price index increased 0.1 percent in the December quarter against market expectations of a 0.1 percent decline and the Reserve Bank’s forecast of a 0.2 percent fall. The headline number was driven by more expensive international and domestic airfares, and has heightened the chances of a rate hike when the Reserve Bank reviews monetary policy next week. Traders are pricing a 46 percent chance of a hike next week, according to the Overnight Index Swap curve.

“We don’t think it’s a major for the Reserve Bank – it’s not stuff they’re looking at and we still think March” for a rate rise, said Tim Kelleher, head of institutional FX sales NZ at ASB Institutional in Auckland. “The kiwi’s still in the middle of its recent range between 81.50 US cents and 84 cents.”

Tomorrow’s Australian inflation figures may weigh on the trans-Tasman cross-rate, with the kiwi near eight-year highs because of the nations’ divergent interest rate paths. Economists expect Australian consumers prices rose 0.5 percent in the December quarter for an annual pace of 2.5 percent, which may quell the need for another rate cut. The kiwi rose to 94.40 Australian cents at 5pm in Wellington from 93.87 cents yesterday.

The local currency gained to 87.06 yen from 85.72 yen yesterday, and advanced to 61.42 euro cents from 60.93 cents. It rose to 50.64 British pence from 50.22 pence.

(BusinessDesk)

© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

Media: Julian Wilcox Leaves Māori TV

Māori Television has confirmed the resignation of Head of News and Production Julian Wilcox. Mr Maxwell acknowledged Mr Wilcox’s significant contribution to Māori Television since joining the organisation in 2004. More>>

ALSO:

Genetics: New Heat Tolerant Cow Developed

Hamilton, New Zealand-based Dairy Solutionz Ltd has led an expert genetics team to develop a new dairy cow breed conditioned to thrive in lower elevation tropical climates and achieve high milk production under heat stress. More>>

Fractals: Thousands More Business Cards Needed To Build Giant Sponge

New Zealand is taking part in a global event this weekend to build a Menger Sponge using 15 million business cards but local organisers say they are thousands of business cards short. More>>

Scoop Business: NZ Net Migration Rises To Annual Record In September

New Zealand’s annual net migration rose to a record in September, beating government forecasts, as the inflow was spurred by student arrivals from India and Kiwis returning home from Australia. More>>

ALSO:

Scoop Business: Fletcher To Close Its Christchurch Insulation Plant, Cut 29 Jobs

Fletcher Building, New Zealand’s largest listed company, will close its Christchurch insulation factory, as it consolidates its Tasman Insulations operations in a “highly competitive market”. More>>

ALSO:

Scoop Business: Novartis Adds Nine New Treatments Under Pharmac Deal

Novartis New Zealand, the local unit of the global pharmaceuticals firm, has added nine new treatments in a far-ranging agreement with government drug buying agency, Pharmac. More>>

ALSO:

Crown Accounts: English Wary On Tax Take, Could Threaten Surplus

Finance Minister Bill English is warning the tax take may come in below forecast in the current financial year, as figures released today confirm it was short by nearly $1 billion in the year to June 30 and English warned of the potential impact of slumping receipts from agricultural exports. More>>

ALSO:

Get More From Scoop

 
 
Standards New Zealand

Standards New Zealand

Mosh Social Media
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news