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

 


NZ dollar gains as prospect of more central bank stimulus

NZ dollar gains as prospect of more central bank stimulus dents greenback demand

By Paul McBeth

May 14 (BusinessDesk) - The New Zealand dollar gained amid speculation central banks in the US and Europe will retain stimulatory conditions, helping underpin growth and driving stocks higher.

The kiwi rose to 86.58 US cents at 5pm in Wellington from 86.30 cents at 8am, when it was unchanged from 5pm yesterday. The trade-weighted index advanced to 80.46 from 80.21 yesterday.

US stock markets reached new records as government figures showed US retail sales grew 0.1 percent in April, below expectations, raising the prospect the Federal Reserve will have to keep near-zero interest rates for longer than expected. A recovering US economy and rising interest rates are expected to see the greenback appreciate, with weak data damping demand for the world’s reserve currency. The US dollar also came under pressure from reports that Germany’s Bundesbank was willing to back an array of measures by the European Central Bank, paving the way for the way for increased stimulus in the region.

“Stock markets continued to climb and there was a continuation of risk-on sentiment being helped by the US data at the moment,” said Alex Hill, head of dealing at HiFX in Auckland. “The US dollar was sold across the board – you can bet against it in the short- and medium-term, but not the long-term.”

HiFX’s Hill said the kiwi has support at 85.80 US cents, and faces resistance at 87 cents.

Local news didn’t deter the gains, after the Reserve Bank affirmed its view that New Zealand’s financial system is in relatively good health, with restrictions on low-equity mortgage lending damping the property market, while government figures showed a slowdown in the pace of consumer spending growth.

Traders will be watching the US producer price index on Wednesday in Washington ahead of the consumer price index on Friday for a gauge on inflation in the world’s biggest economy.

The kiwi was little changed at 92.15 Australian cents from 92.22 cents yesterday after Australia’s Federal government announced austerity measures in the face of large fiscal deficits.

The local currency climbed to 63.11 euro cents from 62.72 cents yesterday, and gained to 51.36 British pence from 51.12 pence. It advanced to 88.43 yen from 88.24 yen yesterday.

(BusinessDesk)

© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

Gordon Campbell: On Tiwai Point (And Saying “No” In Greece)

Its hard to see how Rio Tinto’s one month delay in announcing its intentions about the Tiwai Point aluminium smelter is a good sign for (a) the jobs of the workers affected or (b) for the New Zealand taxpayer. More>>

ALSO:

Half Empty: Dairy Product Prices Extend Slide To Six-Year Low

Dairy product prices continued their slide, paced by whole milk power, in the latest GlobalDairyTrade auction, weakening to the lowest level in six years. More>>

ALSO:

Copper Broadband: Regulator Set To Keep Chorus Pricing Largely Unchanged

The Commerce Commission looks likely to settle on a price close to its original decision on what telecommunications network operator Chorus can charge its customers, though it probably won’t backdate any update. More>>

ALSO:

Lower Levy For Safer Cars: ACC Backtracks On Safety Assessments

Dog and Lemon: “The ACC has based the entire levy system on a set of badly flawed data from Monash University. This Monash data is riddled with errors and false assumptions; that’s the real reason for the multiple mistakes in setting ACC levies.” More>>

ALSO:

Fast Track: TPP Negotiations Set To Accelerate, Groser Says

Negotiations for the Trans-Pacific Partnership will accelerate in July, with New Zealand officials working to stitch up a deal by the month's end, according to Trade Minister Tim Groser. More>>

ALSO:

Floods: Initial Assessment Of Economic Impact

Authorities around the region have compiled an initial impact assessment for the Ministry of Civil Defence, putting the estimated cost of flood recovery at around $120 million... this early estimate includes social, built, and economic costs to business, but doesn’t include costs to the rural sector. More>>

ALSO:

Get More From Scoop

 
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news