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

 


NZ dollar holds gains ahead of expected rate hike

NZ dollar holds gains ahead of expected hike in Reserve Bank interest rates

By Tina Morrison

March 13 (BusinessDesk) – The New Zealand dollar, which has advanced 3.4 percent so far this year, is unchanged ahead of the Reserve Bank meeting today where governor Graeme Wheeler is widely expected to increase interest rates by a quarter point.

The kiwi was unchanged at 84.67 US cents at 8am in Wellington, from 5pm yesterday and 81.91 cents at the start of the year. The trade-weighted index edged lower to 79.31 from 79.49 yesterday.

Governor Wheeler has signalled the official cash rate will have to rise from its record-low 2.5 percent to head off the threat of future inflation, and investors will today be looking for further detail on the extent and pace of any future hikes. Traders have priced in a 100 percent chance of a rate hike when the decision is released at 9am today, according to the Overnight Index Swap curve. Higher interest rates boost the appeal of local assets, increasing demand for the nation’s currency.

“Today the RBNZ is almost unanimously expected to raise the OCR from its historic low of 2.5 percent,” Kymberly Martin, markets strategist at Bank of New Zealand, said in a note. “Any deviation from this expectation (unlikely in our view) would prompt a large response in the currency. Still, even delivery on expectation may prompt the obligatory knee-jerk tick higher in the NZD/USD.”

BNZ’s Martin said she will be looking for potential upgrades to the central bank’s expectations for growth, inflation and the 90-day bank bill rate.

The New Zealand dollar slipped to 94.15 Australian cents at 8am in Wellington from 94.45 cents at 5pm yesterday ahead of the release of Australian employment data at 1:30pm New Zealand time.

Economists expect Australia to have added 15,000 jobs in February and for the unemployment rate to remain at 6 percent.

Chinese retail sales, industrial production and fixed asset investment reports, scheduled for release at 6:30pm New Zealand time, may also weigh on the Australian currency, Martin said.

The kiwi weakened to 60.89 euro cents from 61.11 cents yesterday, was little changed at 50.95 British pence from 50.93 pence and slipped to 86.92 yen from 87.21 yen.

New Zealand’s food price index is released at 10:45am while tonight traders will be eyeing US retail sales data for February.

(BusinessDesk)

© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

Housing Policy: Auckland Densification As Popular As Ebola, English Says

Finance Minister Bill English said calls by the Reserve Bank Governor for more densification in Auckland’s housing were “about as popular in parts of Auckland as Ebola” would be. More>>

ALSO:

Crown Accounts: NZ Government Deficit Smaller Than Expected In First Half

The New Zealand government's operating deficit was smaller than expected in the first six months of the financial year, as the consumption and corporate tax take rose ahead of forecast in December, having lagged estimates in previous months. More>>

ALSO:

Fruit & Veg Crackdown: Auckland Fruit Fly Find Under Investigation

The Ministry for Primary Industries (MPI) is investigating a find of a single male Queensland fruit fly in a surveillance trap in the Auckland suburb of Grey Lynn... MPI has placed legal controls on the movement of fruit and some vegetables outside of a defined circular area which extends 1.5km from where the fly was trapped in Grey Lynn. More>>

ALSO:

Scoop Business: Westpac NZ Reaches $2.97M Swaps Settlement

Westpac Banking Corp’s New Zealand unit has agreed to pay $2.97 million in a settlement with the Commerce Commission over the way the bank sold interest rate swaps to farmers between 2005 and 2012. More>>

ALSO:

Going Dutch: Fonterra Kicks Off $144M Partnership With Dutch Cheese Maker

Fonterra Co-operative Group, the world’s largest dairy exporter, has commissioned a new dairy ingredients plant in Heerenveen, in the north of the Netherlands, its first wholly-owned and operated ingredients plant in Europe. More>>

ALSO:

Scoop Business: NZ Retail Sales Beat Estimates

New Zealand retail sales rose more than expected in the fourth quarter, led by vehicle-related transactions, food and beverages, adding to evidence that cheap credit and a growing jobs market are encouraging consumers to spend. More>>

ALSO:

Delivery Cuts Go Ahead: 'Government Money Grab' From NZ Post

"It's a money grab by the Government as the shareholder of New Zealand Post" says Postal Workers Union advocate Graeme Clarke about the changes announced by NZ Post. More>>

ALSO:

Get More From Scoop

 
 
Standards New Zealand

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