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

 


NZ dollar heads for 1.3% weekly fall vs. Aussie

NZ dollar heads for 1.3% weekly fall vs. A$ as Australian economy picks up

By Paul McBeth

May 9 (BusinessDesk) - The New Zealand dollar is heading for a 1.3 percent weekly decline against its Australian counterpart as data this week shows an improving economy across the Tasman.

The kiwi fell to 92.21 Australian at 5pm in Wellington from 93.39 cents on Friday in New York, and 92.40 cents yesterday. The local currency declined to 80.36 US cents at 5pm from 86.52 cents at 8am and 86.58 cents yesterday.

This week the Reserve Bank of Australia kept the key rate at 2.5 percent, while acknowledging an improving labour market, credit growth and consumer spending. The upbeat assessment was reinforced by data showing strong jobs growth yesterday, while better than expected Chinese trade figures bolstered confidence about Australia’s largest export market.

“People are waking up to the fact that the Aussie economy is a little bit better than it looks,” said Tim Kelleher, head of institutional FX sales NZ at ASB Institutional in Auckland. “We expect the kiwi/Aussie cross to continue to drift off.”

The local currency is heading for a 0.4 percent fall against the greenback from 86.66 US cents on Friday in New York, while the trade weighted index is heading for a 0.2 percent weekly decline. The TWI was at 80.06 from 80.14 yesterday.

A BusinessDesk survey of 10 traders and strategists on Monday predicted the local currency would trade between 84.80 US cents and 88.40 cents this week. Six predicted the kiwi to fall this week, while two expected it to gain and two picked it to remain largely unchanged.

New Zealand’s Reserve Bank deputy governor Grant Spencer today said the central bank doesn’t expect to remove restrictions on low-equity home lending until at least late 2014 as the limits take demand out of the housing market. He also reiterated the view that future interest rate hikes will depend on the strength of the currency, which reduces the prices of imports and takes pressure off headline inflation.

Still, government figures today showed retail spending on credit and debit cards rose last month, with households confidence still elevated, and employment figures this week showed jobs growth wasn’t seeping into higher wages.

The local currency advanced to 62.38 euro cents at 5pm in Wellington from 62.22 cents yesterday after European Central Bank President Mario Draghi signalled a potential interest rate cut next month. The ECB kept its key interest rate steady at a record low 0.25 percent as expected but suggested it might lower it in June if needed.

The kiwi traded at 51.01 from 51.06 British pence after the Bank of England kept its benchmark rate unchanged yesterday. It fell to 87.80 yen from 88.15 yen yesterday.

(BusinessDesk)


© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

Half Full: Dairy Payouts Steady, Cash Will Be Tight

Industry body DairyNZ is advising farmers to focus on strong cashflow management as they look ahead to the 2015-16 season following Fonterra's half-year results announcement today. More>>

ALSO:

First Union: Cotton On Plans To Use “Tea Break” Law

“The Prime Minister reassured New Zealanders that ‘post the passing of this law, will you all of a sudden find thousands of workers who are denied having a tea break? The answer is absolutely not’... Cotton On is proposing to remove tea and meal breaks for workers in its safety sensitive distribution centre. How long before other major chains try and follow suit?” More>>

ALSO:

Scoop Business: NZ-Korea FTA Signed Amid Spying, Lost Sovereignty Claims

A long-awaited free trade agreement between New Zealand and South Korea has been signed in Seoul by Prime Minister John Key and the Korean president, Park Geun-hye. More>>

ALSO:

PM Visit: NZ And Viet Nam Agree Ambitious Trade Target

New Zealand and Viet Nam have agreed an ambitious target of doubling two-way goods and service trade to around $2.2 billion by 2020, Prime Minister John Key has announced. More>>

ALSO:

Scoop Business: NZ Economy Grows 0.8% In Fourth Quarter

The New Zealand economy expanded in the fourth quarter as tourists drove growth in retailing and accommodation, and property sales increased demand for real estate services. More>>

ALSO:

Scoop Business: RBNZ’s Wheeler Keeps OCR On Hold, No Rate Hikes Ahead

The Reserve Bank has removed the prospect of future interest rate hikes from its forecast horizon as a strong kiwi dollar and cheap oil hold down inflation, and the central bank ponders whether to lower its assessment of where “neutral” interest rates should be. The kiwi dollar gained. More>>

ALSO:

Get More From Scoop

 
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news