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

 

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:

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:

Scoop Business: ComCom Charges Hawkins’ Finance Companies Over Debt Recovery

The Commerce Commission has filed criminal proceedings against two finance companies run by former 1980s high-flyer Allan Hawkins over their debt recovery practices. More>>

ALSO:

Science Media Centre: The Big Science Stories Of 2014

It was a dramatic year for science, one that witnessed a severe outbreak of Ebola in West Africa and an historic mission to land a space probe on a comet. On the home front... headlines with animal testing for 'legal highs', 1080 use to tackle increased pest numbers and court action over genetically modified organisms among the most-covered stories. More>>

ALSO:

Tis The Season For Route Announcements: Air NZ Will Start Direct Flights To South America

Air New Zealand, the national carrier, will start its first scheduled service to South America, with direct flights between Auckland and Buenos Aires in Argentina starting in December next year, as it seeks to expand its services in the Pacific Rim. More>>

ALSO:

Scoop Business: Court Backs Green Groups, Overturns Ruataniwha Decision

A High Court judge has ordered the board of inquiry for New Zealand’s largest irrigation scheme, the Ruataniwha Water Storage Scheme in Hawke’s Bay, back to the drawing board on the out-clause it created to allow 615 larger farms to dodge a stringent new water quality rule relating to nitrogen leaching into waterways. More>>

ALSO:

Get More From Scoop

 
 
Standards New Zealand

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