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.

(BusinessDesk)

© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

Interest Rates: RBNZ Hikes OCR To 3.5%, ‘Period Of Assessment’ Now Needed

Reserve Bank governor Graeme Wheeler raised the official cash rate as expected, while signalling a pause in rate hikes to assess the impact of moves so far this year. The kiwi dollar sank after Wheeler said its strength was “unjustified” and that the currency could have “a significant fall.” More>>

ALSO:

Fonterra: Canpac Site 'Resize' To Focus More On Paediatrics

Fonterra is looking at realigning its packing operations at Canpac, in the Waikato, to focus more on paediatric nutritionals... The proposed changes could mean around 110 roles may not be required at the site which currently employs 330. More>>

ALSO:

Scoop Business: Postie Plus Brand Gets 2nd Chance With Well-Funded Pepkor

The Postie Plus brand is getting a new lease of life after South Africa’s Pepkor bought the failed retailer’s assets out of administration and said it will use its purchasing power to reduce costs of stock and fatten margins. More>>

ALSO:

Warming: Warming Signs From State Of Climate Report

Climate data from air, land, sea and ice in 2013 'reflect trends of a warming planet' -- says the latest State of the Climate report, launched by U.S. and New Zealand scientists. More>>

ALSO:

Scoop Business: Embrace Falling Home Affordability, Says NZIER

Despair over the inability to afford a house is misplaced and should be embraced as an opportunity to invest in more wealth-creating activity, says the principal economist at the New Zealand Institute of Economic Research, Shamubeel Eaqub. More>>

Productivity Commission: NZ Regulation Not Keeping Pace

New Zealand regulators often have to work with out-of-date legislation, quality checks are under strain, and regulatory workers need better training and development. More>>

ALSO:

Callaghan Innovation: Investment To Help Deepen Innovation Reporting

Callaghan Innovation, the government’s high tech HQ for Kiwi business, is to help deepen New Zealand media coverage of the commercialisation of innovation through an arms-length partnership with independent business news service BusinessDesk. More>>

ALSO:

Tax Credits, Grants: Greens $1Bn R&D Plan

In the Party’s headline economic announcement, the Greens have launched their plan to build a smarter, more innovative economy which has as its centrepiece an additional $1 billion of government investment in research and development (R&D) above current spend, including tax breaks for business. More>>

ALSO:

Get More From Scoop

 
 
Computer Power Plus

Standards New Zealand

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