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


NZ dollar holds near five-week high on lure of higher rates

NZ dollar holds near five-week high on lure of higher rates

By Suze Metherell

June 13 (BusinessDesk) - The New Zealand dollar held near a five-week high after the Reserve Bank's affirmation that it intends to keep raising interest rates briskly, making the kiwi a standout in a world where major central banks have rates near zero.

The kiwi traded at 86.67 US cents at 5pm in Wellington, having reached as high as 86.99 cents, from 86.82 cents at 8 am. The trade weighted index weakened to 80.68 from 80.83 this morning.

Reserve Bank governor Graeme Wheeler hiked rates a further 25 basis points to 3.25 percent yesterday in a bid to keep a lid on inflationary pressures. The governor affirmed the pace and rate for future hikes, surprising some in the market who thought Wheeler might soften the tightening cycle in the face of lower milk prices weakening economic growth.

"Its been a bit of a consolidating day after fun and games with the RBNZ. The kiwi will remain elevated because of our interest rate track and our expectations of further rate rises," said Stuart Ive, senior adviser at OMF. "Obviously there will be bumps along the way, against the US in particular we will begin to struggle as we see the US economy start to gain a bit of momentum."

New Zealand is one of the few major central banks to shift to a tightening cycle. Across the Tasman the Reserve Bank of Australia has ruled out any changes to its record-low cash rate this year, while Bank of England governor said rising UK mortgage debt may see interest rates rise sooner than the market expects.

The kiwi slipped to 91.98 Australian cents from 92.14 cents this morning, and 92.22 yesterday at 5pm. The currency weakened to 51.08 British pence, from 51.57 pence at 8am and 51.49 yesterday.

It drifted to 88.31 yen from 88.28 yen and 88.29 yen yesterday ahead of the Bank of Japan's meeting this evening where no further change to policy is expected.

The kiwi gave up part of its gains against the European currency, weakening to 63.91 euro cents from 64.01 cents this morning, and a 13-month high of 64.23 euro cents overnight.


© Scoop Media

Business Headlines | Sci-Tech Headlines


Science Investment Plan: Universities Welcome Statement

Universities New Zealand has welcomed the National Statement of Science Investment released by the Government today... this is a critical document as it sets out the Government’s ten-year strategic direction that will guide future investment in New Zealand’s science system. More>>


Scouring: Cavalier Merger Would Extract 'Monopoly Rents' - Godfrey Hirst

A merger of Cavalier Wool Holdings and New Zealand Wool Services International's two wool scouring operations would create a monopoly, says carpet maker Godfrey Hirst. The Commerce Commission on Friday released its second draft determination on the merger, maintaining its view that the public benefits would outweigh the loss of competition. More>>


Scoop Review Of Books: She Means Business

As Foreman says in her conclusion, this is a business book. It opens with a brief biographical section followed by a collection of interesting tips for entrepreneurs... More>>


Hourly Wage Gap Grows: Gender Pay Gap Still Fixed At Fourteen Percent

“The totally unchanged pay gap is a slap in the face for women, families and the economy,” says Coalition spokesperson, Angela McLeod. Even worse, Māori and Pacific women face an outrageous pay gap of 28% and 33% when compared with the pay packets of Pākehā men. More>>


Housing: English On Housing Affordability And The Economy

"Long lead times in the planning process tend to drive prices higher in the upswing of the housing cycle. And those lead times increase the risk that eight years later, when additional supply arrives, the demand shock that spurred the additional supply has reversed. The resulting excess supply could produce a price crash..." More>>


Sweet Health: Sugary Drinks Banned From Hospitals And Health Boards

All hospitals and DHBs are expected to kick sugary drinks out of their premises. University of Auckland researcher, Dr Gerhard Sundborn who also heads public health advocacy group “FIZZ”, says he welcomes the initiative. More>>


Get More From Scoop

Search Scoop  
Powered by Vodafone
NZ independent news