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

 


Kiwi falls against Aussie dollar as inflation accelerates

Kiwi falls against Aussie dollar as inflation accelerates across the Ditch

By Paul McBeth

Jan. 22 (BusinessDesk) - The New Zealand dollar fell against its Australian counterpart after accelerating inflation across the Tasman reduced the chance the Reserve Bank of Australia will cut interest rates.

The kiwi fell to 93.81 Australian cents from 94.46 cents immediate before the inflation report and 94.40 cents yesterday. It traded at 83.22 US cents at 5pm in Wellington from 83.09 cents at 8am and 83.21 cents yesterday.

Australian consumer prices rose at an annual pace of 2.7 percent in the December quarter, ahead of market expectations of a 2.5 percent rise. The faster-than-expected pace of inflation saw the Australian dollar gain on the prospect the RBA won’t be able to cut rates again to revive a moribund economy.

Traders are pricing in an increase of 5 basis points to Australia’s 2.5 percent cash rate over the coming 12 months, according to the Overnight Index Swap curve, having priced in a reduction before the release.

“The CPI number capped the chance of a rate cut any time soon, and the kiwi/Aussie took a bit of a dip,” said Alex Hill, head of dealing at HiFX in Auckland. The kiwi has “big support” at 92.80 Australian cents, and will attract “big demand there” if it falls further, he said.

The Australian inflation figures follow yesterday’s local CPI which unexpectedly rose in the December quarter, fuelling expectations the Reserve Bank of New Zealand will hike rates as early as next week. Traders have been pricing in a 46 percent chance of an increase next week

HiFX’s Hill is sceptical Wheeler will lift rates as housing data is showing early signs the central bank’s restrictions on low equity home lending are starting to bite and while the local currency remains high.

The kiwi fell to 86.54 yen at 5pm in Wellington from 87.06 yen yesterday after the Bank of Japan today stuck to its plan to expand its monetary base by an annual 60 trillion to 70 trillion yen.

It slipped to 50.49 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.

The local currency traded at 61.31 euro cents from 61.42 cents yesterday. The trade-weighted index fell to 78.86 from 79.09.

(BusinessDesk)


© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

Real Estate: Housing Prices Head South In Most Of NZ

Housing became more affordable for first home buyers in many parts of the country including Auckland last month, as falling prices more than offset rising mortgage interest rates. More>>

ALSO:

Cosmetics & Pollution: Proposal To Ban Microbeads

Cosmetic products containing microbeads will be banned under a proposal announced by the Minister for the Environment today. Marine scientists have been advocating for a ban on the microplastics, which have been found to quickly enter waterways and harm marine life. More>>

ALSO:

NIWA: 2016 New Zealand’s Warmest Year On Record

Annual temperatures were above average (0.51°C to 1.20°C above the annual average) throughout the country, with very few locations observing near average temperatures (within 0.5°C of the annual average) or lower. The year 2016 was the warmest on record for New Zealand, based on NIWA’s seven-station series which begins in 1909. More>>

ALSO:

Farewell 2016: NZ Economy Flies Through 2016's Political Curveballs

Dec. 23 (BusinessDesk) - New Zealand's economy batted away some curly political curveballs of 2016 to end the year on a high note, with its twin planks of a booming construction sector and rampant tourism soon to be joined by a resurgent dairy industry. More>>

ALSO:

NZ Economy: More Growth Than Expected In 3rd Qtr

Dec. 22 (BusinessDesk) - New Zealand's economy grew at a faster pace than expected in the September quarter as a booming construction sector continued to underpin activity, spilling over into related building services, and was bolstered by tourism and transport ... More>>

  • NZ Govt - Solid growth for NZ despite fragile world economy
  • NZ Council of Trade Unions - Government needs to ensure economy raises living standards
  • KiwiRail Goes Deisel: Cans electric trains on partially electrified North Island trunkline

    Dec. 21 (BusinessDesk) – KiwiRail, the state-owned rail and freight operator, said a small fleet of electric trains on New Zealand’s North Island would be phased out over the next two years and replaced with diesel locomotives. More>>

  • KiwiRail - KiwiRail announces fleet decision on North Island line
  • Greens - Ditching electric trains massive step backwards
  • Labour - Bill English turns ‘Think Big’ into ‘Think Backwards’
  • First Union - Train drivers condemn KiwiRail’s return to “dirty diesel”
  • NZ First - KiwiRail Going Backwards for Xmas
  • Get More From Scoop

     
     
     
     
     
     
     
     
    Business
    Search Scoop  
     
     
    Powered by Vodafone
    NZ independent news