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

 

Royal Society: Review Finds Community Water Fluoridation Safe And Effective

A review of the scientific evidence for and against the efficacy and safety of fluoridation of public water supplies has found that the levels of fluoridation used in New Zealand create no health risks and provide protection against tooth decay. More>>

ALSO:

Scoop Business: Croxley Calls Time On NZ Production In Face Of Cheap Imports

Croxley Stationery, whose stationery brands include Olympic, Warwick and Collins, plans to cease manufacturing in New Zealand because it has struggled to compete with lower-cost imports in a market where the printed word is giving way to electronic communications. More>>

ALSO:

Prefu Roundup: Forecasts Revised, Surplus Intact

The National government heads into the election with its Budget surplus target broadly intact, delivering a set of economic and fiscal forecasts marginally revised from May to reflect weaker commodity prices and a lower tax take. More>>

ALSO:

Convention Centre: Major New SkyCity Hotel And Laneway For Auckland

Today SKYCITY Entertainment Group Limited revealed plans to build a new hotel and pedestrian laneway of bars, restaurants and boutique shopping on land it owns in the Nelson and Hobson Streets block, expanding the SKYCITY Entertainment Precinct. More>>

ALSO:

Igniting The Spark: Bringing The Digital Enabler To Life

Changing a name is, relatively speaking, the easy part of a re-invention. Changing a culture, getting all the ducks in a row, turning yourself inside-out to become customer-inspired is a much bigger challenge. More>>

ALSO:

Ebola And NZ: Targeted Screening At Airport But Risk Low

The risk of any cases of Ebola in New Zealand remains very low, but health and border authorities are well prepared... anyone arriving in New Zealand who in the last three weeks has visited countries affected will be screened for symptoms of the disease. More>>

ALSO:

Scoop Business: Brewer Seeking Crowd-Funding Cancels Shareholders’ Dividends

Shareholders in Renaissance Brewing company, the first business to seek equity through crowd-funding in New Zealand, have cancelled their claim on $147,000 of accumulated earnings “to make Renaissance a more attractive investment opportunity.” More>>

ALSO:

Get More From Scoop

 
 
Computer Power Plus

Standards New Zealand

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