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

 

Sky City : Auckland Convention Centre Cost Jumps By A Fifth

SkyCity Entertainment Group, the casino and hotel operator, is in talks with the government on how to fund the increased cost of as much as $130 million to build an international convention centre in downtown Auckland, with further gambling concessions ruled out. The Auckland-based company has increased its estimate to build the centre to between $470 million and $530 million as the construction boom across the country drives up building costs and design changes add to the bill.
More>>

ALSO:

RMTU: Mediation Between Lyttelton Port And Union Fails

The Rail and Maritime Union (RMTU) has opted to continue its overtime ban indefinitely after mediation with the Lyttelton Port of Christchurch (LPC) failed to progress collective bargaining. More>>

Earlier:

Science Policy: Callaghan, NSC Funding Knocked In Submissions

Callaghan Innovation, which was last year allocated a budget of $566 million over four years to dish out research and development grants, and the National Science Challenges attracted criticism in submissions on the government’s draft national statement of science investment, with science funding largely seen as too fragmented. More>>

ALSO:

Scoop Business: Spark, Voda And Telstra To Lay New Trans-Tasman Cable

Spark New Zealand and Vodafone, New Zealand’s two dominant telecommunications providers, in partnership with Australian provider Telstra, will spend US$70 million building a trans-Tasman submarine cable to bolster broadband traffic between the neighbouring countries and the rest of the world. More>>

ALSO:

More:

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:

Still In The Red: NZ Govt Shunts Out Surplus To 2016

The New Zealand government has pushed out its targeted return to surplus for a year as falling dairy prices and a low inflation environment has kept a lid on its rising tax take, but is still dangling a possible tax cut in 2017, the next election year and promising to try and achieve the surplus pledge on which it campaigned for election in September. 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:

Get More From Scoop

 
 
Standards New Zealand

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