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

 


Kiwi drops to 2-month low vs A$ after RBA drops easing bias

NZ dollar drops to 2-month low vs A$ after RBA drops easing bias

By Paul McBeth

Feb. 4 (BusinessDesk) - The New Zealand dollar fell to a two-month low against its trans-Tasman counterpart after the Reserve Bank of Australia moved away from further rate cuts after inflation came in higher than expected and Australian consumer spending shows signs of life.

The kiwi fell to 91.45 Australian cents at 5pm in Wellington from 92.33 cents immediately before the release, and down from 92.70 cents yesterday. The local currency traded at 80.98 US cents at 5pm from 80.92 cents at 8am, down from 81.16 cents yesterday.

The RBA kept the cash rate at 2.5 percent, while dropping its reference to adjusting policy to foster growth. Governor Glenn Stevens said inflation in the December quarter was faster than anticipated, and will likely be ahead of the bank’s forecasts, while remaining in the target band. “On present indications, the most prudent course is likely to be a period of stability in interest rates,” Stevens said.

“The RBA dropped its easing bias back to neutral and gave a glimmer it might even think about raising rates if certain conditions are met,” said Imre Speizer, market strategist at Westpac Banking Corp in Auckland. “The kiwi’s going to underperform the Aussie on the cross.”

The kiwi had been near eight-year highs against its Australian counterpart with the possibility of another rate cut by the RBA contrasting the New Zealand Reserve Bank’s next move, which will be higher. The yield on New Zealand’s 10-year government bond was 4.69 percent at 5pm in Wellington, 45 basis points above its Australian counterpart.

Westpac’s Speizer said the kiwi has strong support at 91.50 Australian cents, and if it breaks below that level could fall to 89 cents.

New Zealand commodity prices rose to a new record, according to ANZ New Zealand Bank data today, adding to the upbeat picture for local exporters who are experiencing 40-year high terms of trade.

Global investors have been nervous about risk-sensitive assets in recent weeks with some emerging markets coming under pressure as the Federal Reserve starts slowing its stimulus programme, and traders repatriate funds back to the world’s biggest economy.

The kiwi dollar dropped to 81.91 yen at 5pm in Wellington from 83.08 yen yesterday, and declined to 59.93 euro cents from 60.17 cents. It rose to 49.64 British pence from 49.39 pence. The trade-weighted index fell to 76.60 from 77.09.

(BusinessDesk)


© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

Forestry: Man Charged After 2013 Death

Levin Police have arrested and charged a man with manslaughter in relation to the death of Lincoln Kidd who was killed during a tree felling operation on 19 December 2013. More>>

ALSO:

Smells Like Justice: Dairy Company Fined Over Odour

Dairy company fined over odour Dairy supply company Open Country Dairy Limited has been convicted and fined more than $35,000 for discharging objectionable odour from its Waharoa factory at the time of last year’s ”spring flush” when milk supply was high. More>>

Scoop Business: Dairy Product Prices Decline To Lowest Since July 2012

Dairy product prices dropped to the lowest level since July 2012 in the latest GlobalDairyTrade auction, led by a slump in rennet casein and butter milk powder. More>>

ALSO:

SOE Results: TVNZ Lifts Annual Profit 25% On Flat Ad Revenue, Quits Igloo

Television New Zealand, the state-owned broadcaster, lifted annual profit 25 percent, ahead of forecast and despite a dip in advertising revenue, while quitting its stake in the pay-TV Igloo joint venture with Sky Network Television. More>>

ALSO:

Insurers Up For More Payouts: Chch Property Investor Wins Policy Appeal In Supreme Court

Ridgecrest NZ, a property investor, has won an appeal in the Supreme Court over insurance cover provided by IAG New Zealand for a Christchurch building damaged in four successive earthquakes. More>>

ALSO:

Other Cases:

Royal Society: Review Finds Community Water Fluoridation Safe And Effective

A review of the scientific evidence for and against the efficacy and safety of fluoridation of public water supplies has found that the levels of fluoridation used in New Zealand create no health risks and provide protection against tooth decay. More>>

ALSO:

Scoop Business: Croxley Calls Time On NZ Production In Face Of Cheap Imports

Croxley Stationery, whose stationery brands include Olympic, Warwick and Collins, plans to cease manufacturing in New Zealand because it has struggled to compete with lower-cost imports in a market where the printed word is giving way to electronic communications. More>>

ALSO:

Prefu Roundup: Forecasts Revised, Surplus Intact

The National government heads into the election with its Budget surplus target broadly intact, delivering a set of economic and fiscal forecasts marginally revised from May to reflect weaker commodity prices and a lower tax take. More>>

ALSO:

Get More From Scoop

 
 
Computer Power Plus

Standards New Zealand

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