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

 


NZ dollar TWI hits new record as investors shun greenback

NZ dollar touches three-year high, TWI hits new record, as investors reduce US dollar holdings

By Tina Morrison

May 7 (BusinessDesk) – The New Zealand dollar touched its highest in almost three years overnight and the trade-weighted index reached a new record as investors shunned the greenback in favour of currencies with higher yield.

The kiwi hit 87.79 US cents overnight, the highest level since its post-float high in August 2011 of 88.40 cents. The local currency was trading at 87.47 cents at 8am in Wellington, from 86.91 cents at 5pm yesterday. The trade weighted index touched a record 81.21 overnight, and was trading at 80.95 at 8am from 80.72 yesterday.

The US dollar index, which measures the greenback against a basket of currencies, fell to its lowest since October last year as investors pared back their expectations for growth in the world’s largest economy. Currencies offering the highest yields, such as the New Zealand dollar, benefited.

“There was broad-based US dollar weakness,” said Peter Cavanaugh, client adviser at Bancorp Treasury Services. “Currencies offering good yield were in strongest demand, like the kiwi. The euphoria around US data has evaporated as looking through it, it was no more than a rebound from their atrocious winter weather and the rebound is thoroughly unconvincing.”

Today, traders will be eyeing a speech by Reserve Bank governor Graeme Wheeler to the DairyNZ Farmers' Forum in Hamilton on the significance of dairy to the New Zealand economy.

The New Zealand dollar didn’t react to a 1.1 percent fall in the latest dairy product prices in the GlobalDairyTrade auction this morning. The sixth straight decline adds to expectations Fonterra Cooperative Group will trim its forecast for a record milk payout.

The kiwi is unlikely to react should employment data at 10:45am today show New Zealand unemployment fell to a five-year low as the improvement is already priced in, however a disappointing number could cause the currency to fall, Cavanaugh said.

“At these levels, the kiwi is increasingly exposed to a downside shock,” Cavanaugh said.

The New Zealand dollar touched a four-week high of 63 euro cents overnight, and was trading at 62.80 cents at 8am from 62.59 cents yesterday. The local currency touched a three-week high of 51.69 British pence, and was trading at 51.52 pence at 8am from 51.45 pence yesterday.

The kiwi touched a five-week high of 89.28 yen, and was trading at 88.90 yen at 8am from 88.67 yen yesterday.

Meantime, the New Zealand dollar edged lower to 93.50 Australian cents from 93.63 cents yesterday after the Australian Reserve Bank yesterday kept its benchmark interest rate unchanged and didn’t try to talk down the value of the nation’s currency.

Today, traders will be eying data on Australia’s March retail sales scheduled for release at 1:30pm New Zealand time. Also of interest, China’s HSBC Services PMI is due out at 1:45pm New Zealand time.

Tonight, traders will be eyeing Federal Reserve chair Janet Yellen’s testimony to the Joint Economic Committee at Congress for insights into her thinking about the strength of recent US data.

(BusinessDesk)

© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

Cosmetics & Pollution: Proposal To Ban Microbeads

Cosmetic products containing microbeads will be banned under a proposal announced by the Minister for the Environment today. Marine scientists have been advocating for a ban on the microplastics, which have been found to quickly enter waterways and harm marine life. More>>

ALSO:

NIWA: 2016 New Zealand’s Warmest Year On Record

Annual temperatures were above average (0.51°C to 1.20°C above the annual average) throughout the country, with very few locations observing near average temperatures (within 0.5°C of the annual average) or lower. The year 2016 was the warmest on record for New Zealand, based on NIWA’s seven-station series which begins in 1909. More>>

ALSO:

Farewell 2016: NZ Economy Flies Through 2016's Political Curveballs

Dec. 23 (BusinessDesk) - New Zealand's economy batted away some curly political curveballs of 2016 to end the year on a high note, with its twin planks of a booming construction sector and rampant tourism soon to be joined by a resurgent dairy industry. More>>

ALSO:


NZ Economy: More Growth Than Expected In 3rd Qtr

Dec. 22 (BusinessDesk) - New Zealand's economy grew at a faster pace than expected in the September quarter as a booming construction sector continued to underpin activity, spilling over into related building services, and was bolstered by tourism and transport ... More>>

  • NZ Govt - Solid growth for NZ despite fragile world economy
  • NZ Council of Trade Unions - Government needs to ensure economy raises living standards
  • KiwiRail Goes Deisel: Cans electric trains on partially electrified North Island trunkline

    Dec. 21 (BusinessDesk) – KiwiRail, the state-owned rail and freight operator, said a small fleet of electric trains on New Zealand’s North Island would be phased out over the next two years and replaced with diesel locomotives. More>>

  • KiwiRail - KiwiRail announces fleet decision on North Island line
  • Greens - Ditching electric trains massive step backwards
  • Labour - Bill English turns ‘Think Big’ into ‘Think Backwards’
  • First Union - Train drivers condemn KiwiRail’s return to “dirty diesel”
  • NZ First - KiwiRail Going Backwards for Xmas
  • NIWA: The Year's Top Science Findings

    Since 1972 NIWA has operated a Clean Air Monitoring Station at Baring Head, near Wellington... In June, Baring Head’s carbon dioxide readings officially passed 400 parts per million (ppm), a level last reached more than three million years ago. More>>

    ALSO:

    Get More From Scoop

     
     
     
     
     
     
     
     
    Business
    Search Scoop  
     
     
    Powered by Vodafone
    NZ independent news