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

 


NZ dollar TWI slips from post-float record before RBNZ

NZ dollar TWI slips from post-float record ahead of likely RBNZ rate hike

By Paul McBeth

March 12 (BusinessDesk) - The New Zealand dollar fell from a post-float high on a trade-weighted basis ahead of tomorrow’s Reserve Bank policy review, which will likely kick off a tightening cycle with a rate hike.

The trade-weighted index rose as high as 79.68, and was at 79.46 at 5pm in Wellington from 79.50 yesterday. The kiwi dollar traded at 84.64 US cents at 5pm from 84.61 cents at 8am, and down from 84.80 cents yesterday.

Traders have priced in a 101 percent chance of a rate hike by Reserve Bank governor Graeme Wheeler tomorrow, according to the Overnight Index Swap curve, which would lift the appeal of the kiwi dollar. Wheeler has previously signalled the official cash rate will have to rise from its record-low 2.5 percent to head of the threat of future inflation, and investors will be gauging the extent and pace of any future hikes. The central bank has kept OCR at 2.5 percent since March 2011 when previous governor Alan Bollard cut the rate in response to the February earthquake that devastated Christchurch.

“What we’re not sure about is what comes in the MPS (monetary policy statement) afterwards, and that will be crucial to the market reaction,” said Stuart Ive, senior client adviser at OMF in Wellington. “Expectations are higher (for a rate hike) and the downside risk would be the biggest risk with the kiwi.”

OMF’s Ive said the central bank will be uncomfortable with the strength of the currency. The Reserve Bank projected the TWI would average 77.4 through the March quarter.

New Zealand’s relative economic strength has outperformed its peers, with neighbour Australia under pressure from weak Chinese trade weighing on iron ore and copper prices. Traders will be looking at Australian employment numbers tomorrow to see how the economy is tracking. The kiwi rose to 94.48 Australian cents at 5pm in Wellington from 93.94 cents yesterday.

The local currency fell to 87.20 yen at 5pm from 87.57 yen yesterday, and traded at 61.10 euro cents from 61.14 cents yesterday. It was little changed at 50.92 British pence from 50.95 pence yesterday.

(BusinessDesk)

© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

Onetai Station: Overseas Investment Office Puts Ceol & Muir On Notice

The Overseas Investment Office (OIO) has issued a formal warning to Ceol & Muir and its owners, Argentinian brothers Rafael and Federico Grozovsky, for failing to provide complete and accurate information when they applied to buy Onetai Station in 2013. More>>

ALSO:

Tomorrow, The UN: Feds President Takes Reins At World Farming Body

Federated Farmers president Dr William Rolleston has been appointed acting president of the World Farmers’ Organisation (WFO) at a meeting in Geneva overnight. More>>

ALSO:

I Sing The Highway Electric: Charge Net NZ To Connect New Zealand

BMW is turning Middle Earth electric after today announcing a substantial contribution to the charging network Charge Net NZ. This landmark partnership will enable Kiwis to drive their electric vehicles (EVs) right across New Zealand through the installation of a fast charging highway stretching from Kaitaia to Invercargill. More>>

ALSO:

Watch This Space: Mahia Rocket Lab Launch Site Officially Opened

Economic Development Minster Steven Joyce today opened New Zealand’s first orbital launch site, Rocket Lab Launch Complex 1, on the Mahia Peninsula on the North Island’s east coast. More>>

Earlier:

Marketing Rocks!
Ig Nobel Award Winners Assess The Personality Of Rocks

A Massey University marketing lecturer has received the 2016 Ig Nobel Prize for economics for a research project that asked university students to describe the “brand personalities” of three rocks. More>>

ALSO:

Nurofen Promotion: Reckitt Benckiser To Plead Guilty To Misleading Ads

Reckitt Benckiser (New Zealand) intends to plead guilty to charges of misleading consumers over the way it promoted a range of Nurofen products, the Commerce Commission says. More>>

ALSO:

Get More From Scoop

 
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news