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


NZ dollar soars to 11-month high as risk back in favour

NZ dollar soars to 11-month high as investors favour risk assets

By Tina Morrison

March 19 (BusinessDesk) – The New Zealand dollar jumped to an 11-month high, making it the best performing major currency overnight, as investors turned to riskier assets after Russia indicated it doesn’t intend to claim further territory in Ukraine.

The kiwi touched 86.40 US cents early this morning, its highest level since April, and was trading at 86.28 cents at 8am in Wellington, from 85.63 cents at 5pm yesterday. The trade-weighted index touched a new post-float high of 80.51 and was at 80.39 at 8am from 79.87 yesterday.

Investors favoured more risk sensitive assets after Russian president Vladimir Putin said the country isn’t seeking to split Ukraine further after formally claiming Crimea as part of Russia last night. US and European equities rallied and gold lost some of its safe-haven lustre as investors were relieved that Russia doesn’t appear to be escalating tensions further.

“Risk assets gained overnight,” Bank of New Zealand currency strategist Raiko Shareef said in a note. “The New Zealand dollar has been the main beneficiary from a risk rally stemming from Russia’s indication that it does not intend on claiming further territory in Ukraine.”

Shareef said sentiment towards the New Zealand dollar may also have been boosted after Prime Minister John Key said during a visit to China that agreement had been reached to allow the kiwi to trade directly against the Chinese yuan.

China is New Zealand’s largest trading partner and the agreement will make doing business with China easier by reducing the costs of converting between the two currencies and will stimulate trade and investment, Key announced from Beijing.

Meanwhile, a 5.2 percent fall in prices at Fonterra Cooperative Group’s GlobalDairyTrade auction this morning appears to have had little impact on the kiwi. The nation’s commodity prices will likely fall modestly through this year, which should help moderate the New Zealand dollar’s strength, Shareef said.

In New Zealand today, data will be released on the fourth quarter current account balance at 10:45am.

The New Zealand dollar jumped to 87.59 yen from 87.16 yen yesterday, advanced to 61.94 euro cents from 61.46 cents, increased to 52.01 British pence from 51.45 pence and rose to 94.54 Australian cents from 94.24 cents.


© Scoop Media

Business Headlines | Sci-Tech Headlines


Banks: Westpac Keeps Core Government Transactions Contract

The local arm of Westpac Banking Corp has kept its contract with the New Zealand government to provide core transactions, but will have to share peripheral services with its rivals. More>>


Science Investment Plan: Universities Welcome Statement

Universities New Zealand has welcomed the National Statement of Science Investment released by the Government today... this is a critical document as it sets out the Government’s ten-year strategic direction that will guide future investment in New Zealand’s science system. More>>


Scouring: Cavalier Merger Would Extract 'Monopoly Rents' - Godfrey Hirst

A merger of Cavalier Wool Holdings and New Zealand Wool Services International's two wool scouring operations would create a monopoly, says carpet maker Godfrey Hirst. The Commerce Commission on Friday released its second draft determination on the merger, maintaining its view that the public benefits would outweigh the loss of competition. More>>


Scoop Review Of Books: She Means Business

As Foreman says in her conclusion, this is a business book. It opens with a brief biographical section followed by a collection of interesting tips for entrepreneurs... More>>


Hourly Wage Gap Grows: Gender Pay Gap Still Fixed At Fourteen Percent

“The totally unchanged pay gap is a slap in the face for women, families and the economy,” says Coalition spokesperson, Angela McLeod. Even worse, Māori and Pacific women face an outrageous pay gap of 28% and 33% when compared with the pay packets of Pākehā men. More>>


Housing: English On Housing Affordability And The Economy

"Long lead times in the planning process tend to drive prices higher in the upswing of the housing cycle. And those lead times increase the risk that eight years later, when additional supply arrives, the demand shock that spurred the additional supply has reversed. The resulting excess supply could produce a price crash..." More>>


Get More From Scoop

Search Scoop  
Powered by Vodafone
NZ independent news