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

 


NZ dollar edges up as producer prices hint at inflation

NZ dollar edges up after producer prices foreshadow building inflation pressures

By Paul McBeth

May 19 (BusinessDesk) - The New Zealand dollar edged up in local trading after government figures showed producer prices rose faster than expected, pointing to potential inflationary pressures.

The kiwi rose to 86.33 US cents at 5pm in Wellington from 86.27 cents at 8am, and 86.21 cents on Friday in New York. The trade-weighted index was little changed at 80.26 from 80.18 yesterday.

New Zealand producers faced a 1 percent increase in input prices in the first three months of the year, due to a jump in electricity prices, according to Statistics New Zealand. That was twice the pace investors were expecting, and is seen as a leading indicator of inflation. The Reserve Bank started hiking interest rates in March to head off the threat of looming consumer price rises.

“The PPI (producers price index) was a little bit higher than expected and pulled the kiwi up of its lows,” said Michael Johnston, senior dealer at HiFX in Auckland. “The kiwi will fall in the medium term, but in the short-term it’s pretty well-bid with New Zealand interest rates attractive relative to elsewhere.”

A BusinessDesk survey of 11 traders and strategists predicts the local currency may trade between 85 US cents and 87.40 cents this week. Six predict the kiwi will remain neutral this week, while two pick it to increase and three say it may decline.

HiFX’s Johnston said the GlobalDairyTrade auction on Tuesday in the US will be interesting after prices slumped this year, heightening speculation the forecast payout to Fonterra Cooperative Group’s farmer shareholders will be cut from a record $8.65 per kilogram of milk solids.

The minutes to the Reserve Bank of Australia’s May policy review will be watched tomorrow, with traders gauging the strength of the Australian economy. The kiwi increased to 92.28 Australian cents at 5pm in Wellington from 92.05 cents on Friday in New York.

The local currency gained to 87.61 yen from 87.52 last week, and edged up to 63 euro cents from 62.94 cents. It was little changed at 51.31 British pence from 51.26 pence.

(BusinessDesk)

© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

Fonterra: Canpac Site 'Resize' To Focus More On Paediatrics

Fonterra is looking at realigning its packing operations at Canpac, in the Waikato, to focus more on paediatric nutritionals... The proposed changes could mean around 110 roles may not be required at the site which currently employs 330. More>>

ALSO:

Scoop Business: Postie Plus Brand Gets 2nd Chance With Well-Funded Pepkor

The Postie Plus brand is getting a new lease of life after South Africa’s Pepkor bought the failed retailer’s assets out of administration and said it will use its purchasing power to reduce costs of stock and fatten margins. More>>

ALSO:

Warming: Warming Signs From State Of Climate Report

Climate data from air, land, sea and ice in 2013 'reflect trends of a warming planet' -- says the latest State of the Climate report, launched by U.S. and New Zealand scientists. More>>

ALSO:

Scoop Business: Embrace Falling Home Affordability, Says NZIER

Despair over the inability to afford a house is misplaced and should be embraced as an opportunity to invest in more wealth-creating activity, says the principal economist at the New Zealand Institute of Economic Research, Shamubeel Eaqub. More>>

Productivity Commission: NZ Regulation Not Keeping Pace

New Zealand regulators often have to work with out-of-date legislation, quality checks are under strain, and regulatory workers need better training and development. More>>

ALSO:

Callaghan Innovation: Investment To Help Deepen Innovation Reporting

Callaghan Innovation, the government’s high tech HQ for Kiwi business, is to help deepen New Zealand media coverage of the commercialisation of innovation through an arms-length partnership with independent business news service BusinessDesk. More>>

ALSO:

Tax Credits, Grants: Greens $1Bn R&D Plan

In the Party’s headline economic announcement, the Greens have launched their plan to build a smarter, more innovative economy which has as its centrepiece an additional $1 billion of government investment in research and development (R&D) above current spend, including tax breaks for business. More>>

ALSO:

Inflation: CPI Increases 0.3 Percent In June Quarter

The consumers price index (CPI) rose 0.3 percent in the June 2014 quarter, Statistics New Zealand said today. This follows rises of 0.3 percent the March quarter and 0.1 percent in the December 2013 quarter. More>>

ALSO:

Get More From Scoop

 
 
Computer Power Plus

Standards New Zealand

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