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

 

Budget Policy Statement: Spending Wins Over Tax Cuts; Big Ticket Items Get Boost

Income tax cuts are on hold as the government says “responding to the earthquakes and reducing debt are currently of higher priority”, although election year tax sweeteners remain possible. More>>

ALSO:

Fishy: Is Whitebaiting Sustainable?

The whitebait fry - considered a delicacy by many - are the juveniles of five species of galaxiid, four of which are considered threatened or declining. The SMC asked freshwater experts for their views on the sustainability of the whitebait fishery and whether we're doing enough to monitor the five species of galaxiid that make up whitebait. More>>

ALSO:

Crown Accounts: Smaller-Than-Expected Four-Month Deficit

The New Zealand government's accounts recorded a smaller-than-forecast deficit in the first four months of the fiscal year on a higher-than-expected inflow of corporate and goods and services tax. More>>

ALSO:

On For Christmas: KiwiRail Ferries Back In Full Operation After Quake

KiwiRail’s Interislander ferries are back in full operation for the first time since the Kaikoura earthquake, with the railspan that allows rail wagons to be loaded on the Aratere now restored. More>>

ALSO:

Comerce Commission Investigation: Prosecutions Over Steel Mesh Labelling

Steel & Tube Holdings, along with two other companies, will be prosecuted by the Commerce Commission following the regulator's investigation into seismic steel mesh, while Fletcher Building's steel division has been given a warning. More>>

ALSO:

Wine: 20% Of Marlborough Storage Tanks Damaged By Quake

An estimated 20 percent of wine storage tanks in the Marlborough region, the country’s largest wine producing area, have been damaged by the impact of the recent Kaikoura earthquake. More>>

ALSO:

ACC: Levy Recommendations For 2017 – 2019 Period

• For car owners, a 13% reduction in the average Motor Vehicle levy • For businesses, a 10% reduction in the average Work levy, and changes to workplace safety incentive products • For employees, due to an increase in claims volumes and costs, a 3% increase in the Earners’ levy. More>>

Get More From Scoop

 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news