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

 


NZ dollar soars, approaching 87 US cts, on RBNZ hike track

NZ dollar soars, approaching 87 US cts, after RBNZ confirms rate hike path

By Tina Morrison

June 13 (BusinessDesk) - The New Zealand dollar soared to a five-week high and is edging toward 87 US cents, after the Reserve Bank yesterday raised the benchmark interest for a third time this year and signalled plans for further hikes were intact, increasing the lure of the nation's currency.

The kiwi touched 86.99 US cents this morning, and was trading at 86.82 cents at 8am in Wellington, from 86.50 cents at 5pm yesterday and 85.50 cents before the Reserve Bank announcement at 9am yesterday. The trade-weighted index gained to 80.83 from 80.70 yesterday.

Investors have pushed up the value of the New Zealand dollar after gaining comfort from yesterday's monetary policy statement that interest rate rises would continue as the Reserve Bank indicated in its previous statement in March. Some had bet that governor Graeme Wheeler could soften the pace of his tightening cycle on concern about the effect of lower milk prices on economic growth. Higher interest rates in New Zealand are attractive to investors in an environment where many other major central banks are on a neutral or easing path.

"The New Zealand dollar was the outstanding performer," Kymberly Martin, senior market strategist at Bank of New Zealand, said in a note. " The market was clearly taken by surprise that the RBNZ did not soften its previous stance."

New Zealand's central bank is expected to deliver another two rate rises this year, according to a Reuters poll of economists taken after yesterday's decision. Nine of 13 economists expect the next rise to come in July.

The local currency faces resistance at 87 US cents with support approaching 86 cents, BNZ's Martin said.

In New Zealand today, the Real Estate Institute of New Zealand is expected to release its latest house price data, and the performance of manufacturing index and the food price index are also scheduled for publication.

In China, reports will be released on industrial production, fixed asset investment and retail sales while the US has the producers price index and consumer confidence. A report yesterday showed US retail sales were weaker than expected in May.

The kiwi rose to a 13-month high of 64.23 euro cents overnight, and was trading at 64.01 cents at 8am from 63.87 cents at 5pm yesterday. The local currency touched a month high of 51.64 British pence and was trading at 51.57 pence at 8am from 51.49 pence yesterday. The British pound was weakened by comments from UK Chancellor George Osborne that macro prudential policies may be introduced, implying interest rates at the Bank of England may be lower for longer.

The New Zealand dollar weakened to 92.14 Australian cents from 92.22 cents yesterday. The local currency was little changed at 88.28 yen from 88.29 yen yesterday ahead of the Bank of Japan meeting today where no change to policy is expected.

(BusinessDesk)

© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

SOE Results: TVNZ Lifts Annual Profit 25% On Flat Ad Revenue, Quits Igloo

Television New Zealand, the state-owned broadcaster, lifted annual profit 25 percent, ahead of forecast and despite a dip in advertising revenue, while quitting its stake in the pay-TV Igloo joint venture with Sky Network Television. More>>

ALSO:

Insurers Up For More Payouts: Chch Property Investor Wins Policy Appeal In Supreme Court

Ridgecrest NZ, a property investor, has won an appeal in the Supreme Court over insurance cover provided by IAG New Zealand for a Christchurch building damaged in four successive earthquakes. More>>

ALSO:

Other Cases:

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:

Get More From Scoop

 
 
Computer Power Plus

Standards New Zealand

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