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

 

Budget Policy Statement: Spending Wins Over Tax Cuts; Big Ticket Items Get Boost

Income tax cuts are on hold as the government says “responding to the earthquakes and reducing debt are currently of higher priority”, although election year tax sweeteners remain possible. More>>

ALSO:

Fishy: Is Whitebaiting Sustainable?

The whitebait fry - considered a delicacy by many - are the juveniles of five species of galaxiid, four of which are considered threatened or declining. The SMC asked freshwater experts for their views on the sustainability of the whitebait fishery and whether we're doing enough to monitor the five species of galaxiid that make up whitebait. More>>

ALSO:

Crown Accounts: Smaller-Than-Expected Four-Month Deficit

The New Zealand government's accounts recorded a smaller-than-forecast deficit in the first four months of the fiscal year on a higher-than-expected inflow of corporate and goods and services tax. More>>

ALSO:

On For Christmas: KiwiRail Ferries Back In Full Operation After Quake

KiwiRail’s Interislander ferries are back in full operation for the first time since the Kaikoura earthquake, with the railspan that allows rail wagons to be loaded on the Aratere now restored. More>>

ALSO:

Comerce Commission Investigation: Prosecutions Over Steel Mesh Labelling

Steel & Tube Holdings, along with two other companies, will be prosecuted by the Commerce Commission following the regulator's investigation into seismic steel mesh, while Fletcher Building's steel division has been given a warning. More>>

ALSO:

Wine: 20% Of Marlborough Storage Tanks Damaged By Quake

An estimated 20 percent of wine storage tanks in the Marlborough region, the country’s largest wine producing area, have been damaged by the impact of the recent Kaikoura earthquake. More>>

ALSO:

ACC: Levy Recommendations For 2017 – 2019 Period

• For car owners, a 13% reduction in the average Motor Vehicle levy • For businesses, a 10% reduction in the average Work levy, and changes to workplace safety incentive products • For employees, due to an increase in claims volumes and costs, a 3% increase in the Earners’ levy. More>>

Get More From Scoop

 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news