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

 

Interest Rates: Wheeler Hikes OCR To 3% On Inflationary Pressures, Eyes Kiwi

Reserve Bank governor Graeme Wheeler lifted the official cash rate for the second time in as many months, saying non-tradable inflationary pressures were "becoming apparent" in an economy that’s picking up pace and he's watching the impact of a strong kiwi dollar on import prices. More>>

ALSO:

Scoop Business: Equity Crowd Funding Carries Risks, High Failure Rate

Equity crowd funding, which became legal in New Zealand this month, comes with a high risk of failure based on figures showing existing forays into social capital have a success rate of less than 50 percent, one new entrant says. More>>

ALSO:

Scoop Business: NZ Migration Rises To 11-Year High In March

The country gained a seasonally adjusted 3,800 net new migrants in March, the most since February 2003, said Statistics New Zealand. A net 400 people left for Australia in March, down from 600 in February, according to seasonally adjusted figures. More>>

ALSO:

Hugh Pavletich: New Zealand’s Bubble Economy Is Vulnerable

The recent Forbes e-edition article by Jesse Colombo assesses the New Zealand economy “ 12 Reasons Why New Zealand's Economic Bubble Will End In Disaster ”, seems to have created quite a stir, creating extensive media coverage in New Zealand. More>>

ALSO:

Thursday Market Close: Genesis Debut Sparks Energy Rally

New Zealand stock rose after shares in the partially privatised Genesis Energy soared as much as 18 percent in its debut listing on the NZX, buoying other listed energy companies in the process. Meridian Energy, MightyRiverPower, Contact Energy and TrustPower paced gains. More>>

ALSO:

Power Outages, Roads Close: Easter Storm Moving Down Country

The NZ Transport Agency says storm conditions at the start of the Easter break are making driving hazardous in Auckland and Northland and it advises people extreme care is needed on the regions’ state highways and roads... More>>

ALSO:

Get More From Scoop

 
 
Computer Power Plus
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news