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

 

No Voda/Sky: Commission Declines Clearance For Merger

The Commerce Commission has declined to grant clearance for the proposed merger of Sky Network Television and Vodafone New Zealand. More>>

ALSO:

EARLIER:

Power: IEA Report On New Zealand's Energy System

Outside of its largely low-carbon power sector, managing the economy’s energy intensity and greenhouse gas emissions while still remaining competitive and growing remains a challenge. More>>

ALSO:

NASA: Seven Earth-Size Planets Around A Single Star

NASA's Spitzer Space Telescope has revealed the first known system of seven Earth-size planets around a single star. Three of these planets are firmly located in the habitable zone, the area around the parent star where a rocky planet is most likely to have liquid water. More>>

ALSO:

Auckland Transport Case: Men Guilty Of Corruption And Bribery Will Spend Time In Jail

Two men who were found guilty of corruption and bribery in a Serious Fraud Office (SFO) trial have been sentenced in the Auckland High Court today... The pair are guilty of corruption and bribery offences relating to more than $1 million of bribes which took place between 2005 and 2013 at Rodney District Council and Auckland Transport. More>>

ALSO:

Hager Raid: Westpac Wrong To Release Bank Records To Police

The Privacy Commissioner has censured Westpac Banking Corp for releasing without a court order more than 10 months of bank records belonging to the political activist and journalist Nicky Hager during a police investigation into leaked information published in Hager's 2014 pre-election book, 'Dirty Politics'. More>>

ALSO:

EARLIER:

Get More From Scoop

 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news