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

 


NZ dollar heads for 1% weekly gain on local growth, US rates

NZ dollar heads for 1% weekly gain on strong local economy, low US rates

By Suze Metherell

June 20 (BusinessDesk) - The New Zealand dollar is heading for a 1 percent gain against the greenback this week, remaining at an elevated level after government figures showed strong local economic growth and the Federal Reserve signalled US rates will stay lower for longer.

The kiwi traded at 87.20 US cents at 5pm in Wellington up from 87.07 cents at 8am and 87.13 cents yesterday. The trade-weighted index slipped to 81.04 from 81.09 yesterday. The local currency has advanced week from 86.31 US cents last Friday in New York and is heading for a 0.5 percent weekly gain from 80.65 on the TWI, having reached a post-float record of 81.29.

Government data yesterday showed New Zealand's gross domestic product grew 3.3 percent in the year ended March 31, ahead of a forecast 3.1 percent and supporting the central bank’s view that it must press on with interest rate increases to keep inflation at bay. In contrast, the Federal Reserve revised its forecast for US economic growth in 2014 to between 2.1 percent and 2.3 percent, from an earlier forecast of around 2.8 percent to 3 percent, and lowered its projections for long-term interest rates by about 25 basis points. Offsetting the lower long-term rates, the Fed increased its short-term rate hike expectations for 2015 and 2016 and reduced its monthly bond-buying programme.

"By and large the economic fundamentals remain strong for New Zealand, but I still think we need to be mindful of the dizzy heights we're at, and when we look at the charts historically it hasn't been sustained at these dizzy heights," said Mark Johnson, senior dealer at OMF. "It's up on its highs, and maybe that is to do with squaring it off for the end of the week."

The local currency was little changed after New Zealand consumer confidence rebounded from a six-month low in June, supported by a strong economy, with the ANZ-Roy Morgan consumer confidence index rising to 131.9 from 127.6 in May. A reading above 100 indicates optimists outnumber pessimists.

"It will stay well supported around this 87 cents mark for the moment," Johnson said. Next week "87.80 US cents will be the next resistance level, so we've got a bit of scope to move higher so the expected range is 87 cents to 87.80."

The kiwi was little changed at 51.14 British pence at 5pm, from 51.10 pence this morning, and down from 51.28 pence yesterday, and traded at 88.79 yen from 88.77 yen at 8am and 88.81 yen yesterday. It was almost unchanged at 92.64 Australian cents, from 92.65 cents this morning and 92.64 yesterday and traded at 63.99 euro cents, from 64 cents at 8 am and 64.10 cents yesterday.

(BusinessDesk)

© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

BusinessDesk: APN's NZME Sees Future In Paywalls, Growth In Digital Sales

APN News & Media has touted a single newsroom concept for its NZME unit in New Zealand, similar to what Germany's Die Welt uses, saying an 'integrated sales proposition' is helping it win market share, including ... More>>

Labour Party: Global Milk Prices Now Lowest In 6 Years

The latest fall in the global dairy price has brought it to the lowest level in six years and shows there must be meaningful action in tomorrow’s Budget to diversify the economy, says Labour’s Finance spokesperson Grant Robertson. “Dairy prices ... More>>

BusinessDesk: NZ Inflation Expectations Creep Higher In June Survey

May 19 (BusinessDesk) - New Zealand businesses lifted their expectations for inflation over the next two years, sapping any immediate pressure on the Reserve Bank to cut interest rates, and prompting the kiwi dollar to jump higher. More>>

BusinessDesk: Lower Fuel Costs Drive Down NZ Producer Input, Output Prices

May 19 - Producer input and output prices fell in the first quarter, mainly reflecting lower fuel costs and weakness in prices of meat and dairy products. More>>

Media: Fairfax Media NZ Announces Senior Editorial Team

Fairfax Media New Zealand has today confirmed its new editorial leadership team, as part of a transformation of its newsrooms aimed at enhancing local and national journalism across digital and print. More>>

Science: Flavonoids Reduce Cold And Cough Risk

Flavonoids reduce cold and cough risk Research from the University of Auckland shows eating flavonoids – found in green tea, apples, blueberries, cocoa, red wine and onions – can significantly reduce the risk of catching colds and coughs. The research, ... More>>


BusinessDesk: RBNZ House Alert Speech The Catalyst For Government Action

Prime Minister John Key all but conceded that pressure from the Reserve Bank of New Zealand for concerted action on rampant Auckland house prices was one of the main catalysts for the government's weekend announcements about tightly ... More>>

BusinessDesk: How To Fall Foul Of The New Housing Tax Rules: Tips From IRD

Just because you rented out your investment property doesn't absolve you from paying tax, says the Inland Revenue Department in a summary of commonly made mistakes by non-professional property investors when it comes to their tax liability.More>>

Legal: Superdiversity Law, Policy And Business Stocktake Announced

Mai Chen, Managing Partner at Chen Palmer New Zealand Public and Employment Law Specialists and Adjunct Professor of Law at the University of Auckland, today announced the establishment ... More>>

Housing: More House Price Gains Expected

House price expectations remain high, with a net 56% of respondents expecting house prices will increase. Fears of higher interest rates are fading, consistent with the RBNZ’s signals this year. Affordability and a lack of houses for ... More>>

TDDA: State-Of-The-Art Drug Testing Laboratory To Open In Auckland

World leading drug testing agencies, The Drug Detection Agency (TDDA) and Omega Laboratories, open New Zealand laboratory More>>

Network: Bigpipe Launches Ultra-Fast Broadband Into Wellington

Bigpipe Launches Ultra-Fast Broadband into Wellington Naked broadband provider Bigpipe has extended its national reach, announcing today, the launch of its unlimited UFB offering into Wellington. The Spark Venture business is giving Wellingtonians the ... More>>

Get More From Scoop

 
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news