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

 

Balance Of Trade: NZ Posts Trade Deficit In October On Falling Dairy Exports

New Zealand’s posted its largest monthly trade deficit for October in six years, while narrowing the shortfall from September, led by a fall in dairy exports to China while all main imports into the country rose. More>>

ALSO:

Gigatown Winner: Plenty Of Positives For Dunedin

Although the city has taken the Gigatown title, along with new ultrafast 1Gbps broadband and funding for $700,000 worth of UFB-related initiatives across the community, Mr Cull says Dunedin has gained so much more through its involvement. More>>

ALSO:

R18: The Warehouse Group Praised For Removing Games

The decision by New Zealand’s largest retailer The Warehouse Group (TW Group), to withdraw stocks of the latest version of Grand Theft Auto V (GTA V) and other R18 games, has been praised by advocacy group Stop Demand Foundation. More>>

ALSO:

Air NZ Wine Awards: Victory For Villa Maria As Pinot Noir Thrills

It was a night to remember as Villa Maria Estate picked up one of the highest accolades of the evening, the O-I New Zealand Reserve Wine of the Show Trophy, at the 28th Air New Zealand Wine Awards. The Villa Maria Single Vineyard Southern Clays Marlborough ... More>>

ALSO:

Future Brighter Money: RBNZ Releases New Bank Note Designs

New Zealand’s banknotes are getting brighter and better, with the Reserve Bank today unveiling more vibrant and secure banknote designs which will progressively enter circulation later next year. More>>

ALSO:

Get More From Scoop

 
 
Standards New Zealand

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