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

 

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

Mosh Social Media
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news