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

 


NZ dollar heads for 1.3 percent weekly decline on TWI basis

NZ dollar heads for 1.3 percent weekly decline on TWI basis after central bank meetings

By Paul McBeth

Jan. 31 (BusinessDesk) - The New Zealand dollar is heading for a 1.3 percent fall on a trade-weighted basis this week after the Reserve Bank kept interest rates on hold and the Federal Reserve trimmed another US$10 billion from its bond buying programme.

The trade-weighted index fell to a month-low, trading at 77.26 at 5pm in Wellington from 78.31 at the close of trading last week, and was down from 77.44 yesterday. The kiwi traded at 81.51 US cents at 5pm from 81.41 cents at 8am, down from 81.78 cents yesterday. It’s heading for a 0.7 percent weekly fall from 82.11 cents at the close of trading last week.

A BusinessDesk survey of six traders and strategists on Monday predicted the local currency would trade between 80.80 US cents and 84.20 cents this week. Four predicted the kiwi would fall this week, while two expected it to remain largely unchanged.

Reserve Bank governor Graeme Wheeler kept the official cash rate at 2.5 percent on Thursday, while saying he would hike rates soon in response to building inflationary pressures. In a speech to a Canterbury business audience today, Wheeler flagged inflation as an important risk to local economic growth, with accelerating building activity threatening to drive up broader consumer prices.

“The fact remains we will see interest rate hikes this year – that’s a given,” said Dan Bell, head of corporate sales at HiFX in Auckland. “We’re going to be one of the only central banks in the developed world raising interest rates, and that should continue to provide support for the New Zealand dollar.”

The US Federal Reserve also reviewed its policy this week in chairman Ben Bernanke’s final meeting, keeping interest rates near zero and winding back its quantitative easing programme to US$65 billion a month from US$75 billion.

HiFX’s Bell said the removal of monetary stimulus should support the greenback as capital is repatriated back to the US. While “the New Zealand dollar won’t necessary fall out of bed, it will struggle to carry through on rallies to the 83 cent mark” and strength in the local currency will likely be borne out on the cross-rates, he said.

New Zealand government figures today showed the country posted a trade surplus of $523 million in December, in line with expectations, with rising sales of dairy products to China underpinning export growth.

The local currency sank to 92.77 Australian cents from 93.60 cents yesterday, and slipped to 83.54 yen from 83.67 yen. It increased to 60.12 euro cents from 59.91 cents, and was little changed at 49.45 British pence from 49.39 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