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


NZ dollar gains from 3-mth low as traders regain confidence

NZ dollar gains from three-month low as traders regain confidence in local economy

By Paul McBeth

Jun. 5 (BusinessDesk) - The New Zealand dollar climbed from a three-month low as traders recovered lost confidence in the local economy, and lowered their expectations for a downgrade to the Reserve Bank's interest rate track when it reviews monetary policy next week.

The kiwi rose to,84.41 US cents at 5pm in Wellington from 84.15 cents at 8am and 84.13 cents yesterday. The trade-weighted index advanced to 78.90 from78.67 yesterday.

The New Zealand dollar arrested its slide this month as traders pared back expectations Reserve Bank governor Graeme Wheeler will lower his forecast track for interest rate hikes this year at next Thursday's monetary policy review. Traders started anticipating a slower pace of interest rate increases as dairy prices steadily declined this year, and local inflation stayed in check. Traders are betting Wheeler will hike the official cash rate 80 basis points over the coming 12 months, according to the Overnight Index Swap curve.

"The market is coming to their senses and realised they have overdone how much they think the Reserve Bank will downgrade the interest rate track next week," said Imre Speizer, market strategist at Westpac Banking Corp in Auckland. "There was a very large gap that opened up between the Reserve Bank's latest forecast from March and where the market has priced it."

Investors will be watching the European Central Bank policy meeting on Thursday in Brussels, where president Mario Draghi is expected to announce new measures to stimulate the European economy. The kiwi gained to 62.04 euro cents at 5pm from 61.79 cents yesterday.

Westpac's Speizer said if Draghi delivers more stimulus, that should push interest rates lower and weigh on the kiwi dollar, which is seen as attractive because of New Zealand's relatively high rates, and if Draghi doesn't announce new measures, that will probably support the local currency.

The Bank of England also reviews monetary policy on Thursday in London, and is expected to keep rates unchanged. The kiwi edged up to 50.40 British pence from 50.29 pence yesterday.

Traders will be watching US employment figures on Friday in Washington for an update on the strength of the world's biggest economy after a private payrolls report missed expectations.

The kiwi increased to 90.90 Australian cents at 5pm in Wellington from 90.73 cents yesterday, and advanced to 86.56 yen from 86.35 yen.


© Scoop Media

Business Headlines | Sci-Tech Headlines


Trade: NZ Trade Deficit Widens To A Record In September

Oct. 27 (BusinessDesk) - New Zealand's monthly trade deficit widened to a record in September as meat exports dropped to their lowest level in more than three years. More>>


Animal Welfare: Cruel Practices Condemned By DairyNZ Chief

DairyNZ chief executive Tim Mackle says cruel and illegal practices are not in any way condoned or accepted by the industry as part of dairy farming.

Tim says the video released today by Farmwatch shows some footage of transport companies and their workers, as well as some unacceptable behaviour by farmers of dragging calves. More>>


Postnatal Depression: 'The Thief That Steals Motherhood' - Alison McCulloch

Post-natal depression is a sly and cruel illness, described by one expert as ‘the thief that steals motherhood’, it creeps up on its victims, hiding behind the stress and exhaustion of being a new parent, catching many women unaware and unprepared. More>>


DIY: Kiwi Ingenuity And Masking Tape Saves Chick

Kiwi ingenuity and masking tape has saved a Kiwi chick after its egg was badly damaged endangering the chick's life. The egg was delivered to Kiwi Encounter at Rainbow Springs in Rotorua 14 days ago by a DOC worker with a large hole in its shell and against all odds has just successfully hatched. More>>


International Trade: Key To Lead Mission To India; ASEAN FTA Review Announced

Prime Minister John Key will lead a trade delegation to India next week, saying the pursuit of a free trade agreement with the protectionist giant is "the primary reason we're going" but playing down the likelihood of early progress. More>>



MYOB: Digital Signatures Go Live

From today, Inland Revenue will begin accepting “digital signatures”, saving businesses and their accountants a huge amount of administration time and further reducing the need for pen and paper in the workplace. More>>

Oil Searches: Norway's Statoil Quits Reinga Basin

Statoil, the Norwegian state-owned oil company, has given up oil and gas exploration in Northland's Reinga Basin, saying the probably of a find was 'too low'. More>>


Modern Living: Auckland Development Blowouts Reminiscent Of Run Up To GFC

The collapse of property developments in Auckland is "almost groundhog day" to the run-up of the global financial crisis in 2007/2008 as banks refuse to fund projects due to blowouts in construction and labour costs, says John Kensington, the author of KPMG's Financial Institutions Performance Survey. More>>


Get More From Scoop

Search Scoop  
Powered by Vodafone
NZ independent news