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

 

Budget Building Battle: Bill English Blames Council On Housing

The Nation: Finance Minister blames Auckland Council for housing shortage, saying it is responsible for land, housing and infrastructure supply in the city, while government provides rental subsidies... More>>

ALSO:

Megiaglommeration: NZME And Fairfax Apply For Authorisation To Merge

The Commerce Commission has received an application from Wilson and Horton Limited (trading as NZME) and Fairfax NZ Limited seeking authorisation to merge their media operations in New Zealand. More>>

ALSO:

Brewing: Lion To Buy Cult Upper Hutt Brewer Panhead

Lion - Beer, Spirits and Wine (NZ), New Zealand's biggest beer maker, has agreed to buy Panhead Custom Ales from the family of founder Mike Neilson, its second such purchase of a popular craft brewer after the acquisition of Dunedin-based Emerson's Brewing Co in 2012. More>>

ALSO:

Half Empty: Fonterra's 2017 Opening Forecast Below Expectations

Fonterra Cooperative Group raised its forecast farmgate milk payout for next season by less than expected as the world's largest dairy exporter predicts lower prices will crimp production and supply will pick up. The New Zealand dollar fell. More>>

ALSO:

Pest Control: Mouse Blitz Team Leaves For Antipodes

The Million Dollar Mouse project to rid Antipodes Island of mice is underway with the departure of a rodent eradication team to the remote nature reserve and World Heritage Area. More>>

Get More From Scoop

 
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news