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

 

Media: Julian Wilcox Leaves Māori TV

Māori Television has confirmed the resignation of Head of News and Production Julian Wilcox. Mr Maxwell acknowledged Mr Wilcox’s significant contribution to Māori Television since joining the organisation in 2004. More>>

ALSO:

Genetics: New Heat Tolerant Cow Developed

Hamilton, New Zealand-based Dairy Solutionz Ltd has led an expert genetics team to develop a new dairy cow breed conditioned to thrive in lower elevation tropical climates and achieve high milk production under heat stress. More>>

Fractals: Thousands More Business Cards Needed To Build Giant Sponge

New Zealand is taking part in a global event this weekend to build a Menger Sponge using 15 million business cards but local organisers say they are thousands of business cards short. More>>

Scoop Business: NZ Net Migration Rises To Annual Record In September

New Zealand’s annual net migration rose to a record in September, beating government forecasts, as the inflow was spurred by student arrivals from India and Kiwis returning home from Australia. More>>

ALSO:

Scoop Business: Fletcher To Close Its Christchurch Insulation Plant, Cut 29 Jobs

Fletcher Building, New Zealand’s largest listed company, will close its Christchurch insulation factory, as it consolidates its Tasman Insulations operations in a “highly competitive market”. More>>

ALSO:

Scoop Business: Novartis Adds Nine New Treatments Under Pharmac Deal

Novartis New Zealand, the local unit of the global pharmaceuticals firm, has added nine new treatments in a far-ranging agreement with government drug buying agency, Pharmac. More>>

ALSO:

Crown Accounts: English Wary On Tax Take, Could Threaten Surplus

Finance Minister Bill English is warning the tax take may come in below forecast in the current financial year, as figures released today confirm it was short by nearly $1 billion in the year to June 30 and English warned of the potential impact of slumping receipts from agricultural exports. More>>

ALSO:

Get More From Scoop

 
 
Standards New Zealand

Standards New Zealand

Mosh Social Media
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news