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

 


NZ dollar heads for 1.8% weekly gain

NZ dollar heads for 1.8% weekly gain as Chinese stimulus talk adds to upbeat local outlook

By Paul McBeth

March 28 (BusinessDesk) - The New Zealand dollar is heading for a 1.8 percent weekly gain against the greenback and near new post-float highs on a trade-weighted basis amid speculation China’s government will take action to shore up a sluggish economy, adding to an upbeat outlook for local growth.

The kiwi rose to 86.85 US cents at 5pm in Wellington from 85.32 cents at the New York close last Friday. It reached a two-and-a-half year high 86.96 US cents, and was up from 86.72 cents at 8am and 86.25 cents yesterday. The trade-weighted index reached a new post-float high 81.03, trading at 80.94 at 5pm from 80.43 yesterday. The TWI is heading for a 1.2 percent weekly gain from 80 at the New York close last Friday.

A BusinessDesk survey of nine traders and strategists predicted the local currency would trade between 84 US cents and 87 cents this week, from 85.40 cents at 8am on Monday. Three expected the currency to remain relatively unchanged, four expected it to gain and two said it could fall.

The Australasian currencies got a boost today after Chinese Premier Li Keqiang was reported as saying he was confident growth will be in a reasonable range, and that his nation can’t ignore risks facing the economy, fuelling expectations the government will act to spur the economic expansion. China is New Zealand and Australia’s largest trading partner.

The prospect of Chinese stimulus added to an already favourable view of the New Zealand economy, which got another boost yesterday when the February trade balance beat expectations, and after Reserve Bank deputy governor Grant Spencer signalled the monetary authority will continue to hike interest rates even with an elevated exchange rate.

“We all know we’ve got a strong enough outlook, and then we had yesterday’s trade balance beating expectations,” said Sam Tuck, senior FX strategist at ANZ Bank New Zealand. “Everybody’s expecting there to be strength, but beating consensus forecasts has given offshore people a good reason to buy the kiwi.”

Large financial institutions will reset their asset allocations on Monday for the end of the quarter, though ANZ’s Tuck doesn’t expect that to be a big influence on the kiwi.

Next week traders will be watching monetary policy reviews in Australia, Europe and the UK, as well as US employment figures and a speech from Federal Reserve chair Janet Yellen.

ANZ’s Tuck said US economic data will be keenly watched as investors prepare for the world’s biggest economy to gather some momentum, which should spur the greenback to gain.

“On all measures we’re looking at, the kiwi is over-valued,” Tuck said. “The question is timing, and finding the catalyst to bring it back.”

The local currency gained to 93.57 Australian cents at 5pm in Wellington from 93.37 cents yesterday, and rose to 88.70 yen from 87.99 yen. It advanced to 52.25 British pence from 52 pence yesterday, and increased to 63.17 euro cents from 62.57 cents.

(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