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

 

NZ dollar gains after record February trade surplus

NZ dollar gains as record February trade surplus affirms local growth story

By Paul McBeth

March 27 (BusinessDesk) - The New Zealand dollar rose after a record trade surplus for the month of February fuelled optimism about local economic growth, which has tipped the Reserve Bank into a tightening cycle to head off the threat of future inflation.

The kiwi rose to 86.25 US cents at 5pm in Wellington from 85.95 cents at 8am and 85.87 cents yesterday. The trade-weighted index advanced to 80.43, matching a post-float record it reached last week, from 80.16.

New Zealand’s posted a trade surplus of $818 million in February, a record for that month, and beating economists’ expectations of $600 million. The country has been benefitting from rapid gains in exports of dairy, meat and logs to China, which now accounts for about 21 percent of New Zealand’s international sales. The trade data added to upbeat view of New Zealand’s economy, which is forecast to grow at an annual pace of 3 percent this year.

That momentum prompted the Reserve Bank to lift the official cash rate 25 basis points to 2.75 percent this month, and signal a further 2 percentage points of increases over the coming two years as governor Graeme Wheeler looks to keep inflation in check.

“The trade balance was a rip-snorter,” said Tim Kelleher, head of institutional FX sales NZ at ASB Institutional. “Nothing bad is coming out of New Zealand at the moment, and it’s a continuation of the theme” which has supported the kiwi, he said.

Ongoing concerns about the tensions between the Group of 7 leading industrialised nations and Russia fuelled demand for Japan’s yen, typically a favourite among investors looking to reduce the risk of their holdings, which strengthened to 102.03 per US dollar from 102.28 yesterday. The kiwi gained to 88 yen at 5pm in Wellington from 87.83 yen.

The local currency pared a decline against its Australian counterpart, trading at 93.35 Australian cents from 93.59 cents yesterday. It increased to 62.58 euro cents from 62.43 cents yesterday, and was little changed at 52.01 British pence from 51.94 pence.

(BusinessDesk)

© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

NZ's Space Programme: Rocket Lab Makes It To Space (But Not Orbit)

Electron lifted-off at 16:20 NZST from Rocket Lab Launch Complex 1 on the Mahia Peninsula in New Zealand. It was the first orbital-class rocket launched from from a private launch site in the world. More>>

ALSO:

Earlier:

Budget: Irrigate (Good Times, Come On!)

Additional grant funding of $26.7 million over the next three years plus a capital boost of $63 million towards irrigation investments in Budget 2017 will deliver economic and environmental benefits through better use of water... More>>

ALSO:

Silver Fern Farms: Proposal To Close Fairton Sheepmeat Plant

Silver Fern Farms has advised its people of the proposal to permanently close the site, and has discussed potential transfer options to its other sites in the region as part of the consultation process...
More>>

ALSO:

MPI: Myrtle Rust Appears In Taranaki

The nursery in Waitara (just north of New Plymouth) reported suspected myrtle rust symptoms on young plants to the Ministry’s 0800 number yesterday (Tuesday). More>>

ALSO: