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.


© Scoop Media

Business Headlines | Sci-Tech Headlines


Shocking Dairy Footage: MPI Failing Our Animals And Damaging Our Reputation

Greens “Nathan Guy needs to urgently look into how his ministry is enforcing animal welfare standards, how these appalling incidents happened under its watch and what it’s going to do prevent similar incidents happening again in the future." More>>


Land & Water Forum: Fourth Report On Water Management

The Land and Water Forum (LWF) today published its fourth report, outlining 60 new consensus recommendations for how New Zealand should improve its management of fresh water and calling on the Government to urgently adopt all of its recommendations from earlier reports. More>>



Welcome Home: Record High Migration Stokes 41-Year High Population Growth

New Zealand annual net migration hit a new high in October as more people arrived from than departed for Australia for the first time in more than 20 years. More>>


Citizens' Advice Bureau: Report Shows Desperate Housing Situation Throughout NZ

CAB's in-depth analysis of over 2000 client enquiries about emergency accommodation shows vulnerable families, pregnant women and children living in cars and garages, even after seeking assistance from the Ministry of Social Development and Housing New Zealand. More>>


Get More From Scoop

Search Scoop  
Powered by Vodafone
NZ independent news