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

 

Scoop Business: RBNZ Keeps OCR At 3.5%, Signals Slower Pace Of Future Hikes

Reserve Bank governor Graeme Wheeler kept the official cash rate at 3.5 percent and signalled he won’t be as aggressive with future rate hikes as previously thought as inflation remains tamer than expected. The kiwi dollar fell to a seven-month low. More>>

ALSO:

Weather: Dry Spells Take Hold In South Island

Many areas in the South Island are tracking towards record dry spells as relatively warm, dry weather that began in mid-August continues... for some South Island places, the current period of fine weather is quite rare. More>>

ALSO:

Scoop Business: Productivity Commission To Look At Housing Land Supply

The Productivity Commission is to expand on its housing affordability report with an investigation into improving land supply and development capacity, particularly in areas with strong population growth. More>>

ALSO:

Forestry: Man Charged After 2013 Death

Levin Police have arrested and charged a man with manslaughter in relation to the death of Lincoln Kidd who was killed during a tree felling operation on 19 December 2013. More>>

ALSO:

Smells Like Justice: Dairy Company Fined Over Odour

Dairy company fined over odour Dairy supply company Open Country Dairy Limited has been convicted and fined more than $35,000 for discharging objectionable odour from its Waharoa factory at the time of last year’s ”spring flush” when milk supply was high. More>>

Scoop Business: Dairy Product Prices Decline To Lowest Since July 2012

Dairy product prices dropped to the lowest level since July 2012 in the latest GlobalDairyTrade auction, led by a slump in rennet casein and butter milk powder. More>>

ALSO:

SOE Results: TVNZ Lifts Annual Profit 25% On Flat Ad Revenue, Quits Igloo

Television New Zealand, the state-owned broadcaster, lifted annual profit 25 percent, ahead of forecast and despite a dip in advertising revenue, while quitting its stake in the pay-TV Igloo joint venture with Sky Network Television. More>>

ALSO:

Get More From Scoop

 
 
Computer Power Plus

Standards New Zealand

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