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

 


NZ dollar gains as traders eye RBNZ's review

NZ dollar gains as traders eye RBNZ's review, global risk appetite picks up

By Jonathan Underhill

June 9 (BusinessDesk) - The New Zealand dollar gained on speculation the central bank will reiterate its projection for rising interest rates at this week's review against a backdrop of a strengthening domestic growth and signs of global growth that are encouraging investors to take on risk.

The kiwi rose to 85.13 US cents from 84.89 cents at 8am in Wellington and up from 85.01 cents at the New York close on Friday. The trade-weighted index rose to 79.36 from 79.11 on Friday.

The Reserve Bank is expected to raise the official cash rate a quarter point to 3.25 percent when releasing the monetary policy statement on Thursday but there has been speculation he may soften the track of future hikes to the OCR, signalling borrowing costs don't need to rise as much as it has flagged. That leaves open a risk governor Graeme Wheeler he will reiterate the interest rate track given in March, stoking gains in market rates and the currency.

"Market pricing is quite a bit below where the RBNZ's track is," said Mark Johnson, senior client adviser at OMF. "The Reserve Bank is trying to prep the market for a normalisation of rates."

The March MPS projected 90-day bank bills would be at 4.3 percent in the first quarter of 2015, while market pricing puts them at 3.96 percent, Johnson said.

Still, the central bank may also repeat his view that the kiwi dollar is unsustainably high and can't keep appreciating. Wheeler and Reserve Bank of Australia governor Glenn Stevens, both battling high currencies, may be hoping the greenback eventually comes to their aid amid signs the US economy is recovering. That was reinforced by US non-farm payrolls data on Friday that showed the world's biggest economy added more than 200,000 jobs for the fourth straight month, helping drive stock benchmarks on Wall Street to a record close.

Stocks continued to rally in Asia as figures showed Japan's gross domestic product grew an annualised 6.7 percent in the first quarter, faster than expected.

The New Zealand dollar was little changed at 91.01 Australian cents from 90.95 cents on Friday. Australian banks are closed for the Queen’s Birthday public holiday.

The local currency gained to 62.40 euro cents from 62.14 cents on Friday and edged up to 50.65 British pence from 50.48 pence. The kiwi rose to 87.29 yen from 86.83 yen on Friday.

(BusinessDesk)

© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

Housing: Affordability Drops 14%, Driven By Auckland Prices

Housing affordability across New Zealand fell 14 percent in the year ending November 2014, with Auckland’s lack of affordability set to reach levels it hit during the height of the global financial crisis, according to the latest Massey University Home Affordability Report More>>

ALSO:

The Dry: Fonterra Drops Forecast Milk Volumes By 3.3 Percent

Fonterra Cooperative Group, the worlds largest dairy exporter, reduced its milk volume forecast for the 2014-2015 season by 3.3 per cent due to the impact of dry weather on production in recent weeks. More>>

ALSO:

Strike: Lyttelton Port Workers Vote To Escalate Dispute

Members of the Rail and Maritime Transport Union (RMTU) at Lyttelton Port today voted to escalate their industrial action. Around 200 RMTU members have been operating an overtime ban since 17 December and today they endorsed a series of full withdrawals of labour at the port. More>>

ALSO:

Scoop Business: NZ Dollar Falls To 3-Year Low As Investors Favour Greenback

The New Zealand dollar fell to its lowest in more than three years as investors sold euro and bought US dollars, weakening other currencies against the greenback. More>>

ALSO:

Scoop Business: NZ Govt Operating Deficit Smaller Than Expected

The New Zealand’s government’s operating deficit was smaller than expected in the first five months of the financial year as a clampdown on expenditure managed to offset a shortfall in the tax-take from last month’s forecast. More>>

ALSO:

0.8 Percent Annually:
NZ Inflation Falls Below RBNZ's Target

New Zealand's annual pace of inflation slowed to below the Reserve Bank's target band in the final three months of the year, giving governor Graeme Wheeler more room to keep the benchmark interest rate lower for longer.More>>

ALSO:

Get More From Scoop

 
 
Standards New Zealand

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