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.


© Scoop Media

Business Headlines | Sci-Tech Headlines


Land & Water Forum: Fourth Report On Water Management

The Land and Water Forum (LWF) today published its fourth report, outlining 60 new consensus recommendations for how New Zealand should improve its management of fresh water and calling on the Government to urgently adopt all of its recommendations from earlier reports. More>>



Welcome Home: Record High Migration Stokes 41-Year High Population Growth

New Zealand annual net migration hit a new high in October as more people arrived from than departed for Australia for the first time in more than 20 years. More>>


Citizens' Advice Bureau: Report Shows Desperate Housing Situation Throughout NZ

CAB's in-depth analysis of over 2000 client enquiries about emergency accommodation shows vulnerable families, pregnant women and children living in cars and garages, even after seeking assistance from the Ministry of Social Development and Housing New Zealand. More>>


Speaking For The Bees: Greens Call For Neonicotinoid Pesticide Ban

The National Government should ban the use of controversial pesticides called neonicotinoids after evidence has revealed that even at low doses they cause harm to bee populations, the Green Party said today. More>>


Get More From Scoop

Search Scoop  
Powered by Vodafone
NZ independent news