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

 


NZ dollar holds gains as rate hike chances rise

NZ dollar holds gains as inflation heightens anticipation of rate hike, dairy prices rise

By Paul McBeth

Jan. 22 (BusinessDesk) - The New Zealand dollar held yesterday’s gains after a surprise rise in December inflation heightened expectations the Reserve Bank might hike interest rates as early as next week and as the latest Fonterra Cooperative Group dairy auction showed an increase in prices.

The kiwi traded at 83.09 US cents at 8am from 83.21 cents yesterday, holding on to most of yesterday’s gain. The trade-weighted index decreased to 78.91 from 79.09.

Traders are pricing in a 46 percent chance the Reserve Bank will lift its 2.5 percent official cash rate when it reviews policy next week after government figures yesterday showed consumer prices rose 0.1 percent in the December quarter against expectations of a 0.1 percent decline. That kept the kiwi dollar supported on the prospect of higher interest rates, and a rise in dairy prices at the GlobalDairyTrade auction underpinned the view of New Zealand’s strengthening economy.

“We need to see some RBNZ action before you’d expect to see any strength in the kiwi, and it can trade between 82 US cents and 84 cents until Thursday” next week when the bank reviews policy, said Sam Tuck, senior FX strategist at ANZ New Zealand. “External events, such as the US recovery, would be the main driver once we know the hiking cycle has started.”

Australian inflation data today is expected to show consumer prices rose 0.5 percent in the December quarter, and investors will also be looking at a consumer confidence survey for any indication of an economic revival across the Tasman.

ANZ’s Tuck said the kiwi dollar is likely to find support against its Australian counterpart until the Reserve Bank meeting next week. The local currency traded at 94.30 Australian cents at 8am in Wellington from 94.40 cents yesterday.

The kiwi fell to 86.576 yen from 87.06 yen yesterday ahead of the Bank of Japan’s policy review, which is expected to keep the status quo.

The local currency declined to 50.42 British pence from 50.64 pence ahead of UK employment figures which are expected to show a decline in the unemployment rate, and minutes to the Bank of England’s last meeting. It slipped to 61.29 euro cents from 61.42 cents yesterday.

(BusinessDesk)


© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

Fonterra: Canpac Site 'Resize' To Focus More On Paediatrics

Fonterra is looking at realigning its packing operations at Canpac, in the Waikato, to focus more on paediatric nutritionals... The proposed changes could mean around 110 roles may not be required at the site which currently employs 330. More>>

ALSO:

Scoop Business: Postie Plus Brand Gets 2nd Chance With Well-Funded Pepkor

The Postie Plus brand is getting a new lease of life after South Africa’s Pepkor bought the failed retailer’s assets out of administration and said it will use its purchasing power to reduce costs of stock and fatten margins. More>>

ALSO:

Warming: Warming Signs From State Of Climate Report

Climate data from air, land, sea and ice in 2013 'reflect trends of a warming planet' -- says the latest State of the Climate report, launched by U.S. and New Zealand scientists. More>>

ALSO:

Scoop Business: Embrace Falling Home Affordability, Says NZIER

Despair over the inability to afford a house is misplaced and should be embraced as an opportunity to invest in more wealth-creating activity, says the principal economist at the New Zealand Institute of Economic Research, Shamubeel Eaqub. More>>

Productivity Commission: NZ Regulation Not Keeping Pace

New Zealand regulators often have to work with out-of-date legislation, quality checks are under strain, and regulatory workers need better training and development. More>>

ALSO:

Callaghan Innovation: Investment To Help Deepen Innovation Reporting

Callaghan Innovation, the government’s high tech HQ for Kiwi business, is to help deepen New Zealand media coverage of the commercialisation of innovation through an arms-length partnership with independent business news service BusinessDesk. More>>

ALSO:

Tax Credits, Grants: Greens $1Bn R&D Plan

In the Party’s headline economic announcement, the Greens have launched their plan to build a smarter, more innovative economy which has as its centrepiece an additional $1 billion of government investment in research and development (R&D) above current spend, including tax breaks for business. More>>

ALSO:

Inflation: CPI Increases 0.3 Percent In June Quarter

The consumers price index (CPI) rose 0.3 percent in the June 2014 quarter, Statistics New Zealand said today. This follows rises of 0.3 percent the March quarter and 0.1 percent in the December 2013 quarter. More>>

ALSO:

Get More From Scoop

 
 
Computer Power Plus

Standards New Zealand

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