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

 


NZ dollar at 3-yr high, TWI at record as higher rates appeal

NZ dollar at 3-year high, TWI surges to record as higher rates lure investors

By Tina Morrison

June 27 (BusinessDesk) - New Zealand's trade-weighted currency index touched a record 81.67 and the kiwi reached a three-year high as the nation's relatively attractive yields in a global environment of low interest rates lured overseas investors.

The trade-weighted index was at 81.57 at 8am in Wellington from 81.42 at 5pm yesterday. The New Zealand dollar was trading at 87.72 US cents, having reached 87.87 cents, from 87.59 yesterday.

New Zealand's higher interest rates and stable political environment are attractive to overseas investors seeking higher yielding returns than they can achieve in their home countries.

While the European Central Bank is looking at increasing stimulus to bolster the region's economy and interest rates remain at record lows in most other major economies, New Zealand's central bank has raised interest rates three times this year and is expected to hike again as soon as next month to stave off inflation in an economy stimulated by housing demand, migration and demand for commodity exports.

"It's not surprising as we look relatively calm and stable and we have got another rate hike coming in July," said Tim Kelleher, ASB Bank head of institutional foreign exchange sales New Zealand. "The money is going to go where the money is going to go which is it is going to seek the highest yield it can in a reasonably calm political stable environment. It is us. We look very attractive."

Kelleher said the kiwi is likely to remain in demand as investors look to a track of higher interest rates and further bond sales.

While the Reserve Bank may wish the currency would soften in line with recent weakness in commodity prices, it is unlikely to intervene to try and bring the kiwi down because there is no chance it would succeed while there is strong investor demand, Kelleher said. A spokesman for the Reserve Bank declined to comment.

The kiwi will probably trade between 87.50 US cents and 88 cents today, he said.

Today in New Zealand, the monthly trade balance data is released at 10:45am.

The New Zealand dollar advanced to 93.19 Australian cents from 93.11 cents yesterday, rose to 64.45 euro cents from 64.24 cents, edged lower to 51.51 British pence from 51.55 pence and gained to 89.21 yen from 89.13 yen.

(BusinessDesk)

© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

SOE Results: TVNZ Lifts Annual Profit 25% On Flat Ad Revenue, Quits Igloo

Television New Zealand, the state-owned broadcaster, lifted annual profit 25 percent, ahead of forecast and despite a dip in advertising revenue, while quitting its stake in the pay-TV Igloo joint venture with Sky Network Television. More>>

ALSO:

Insurers Up For More Payouts: Chch Property Investor Wins Policy Appeal In Supreme Court

Ridgecrest NZ, a property investor, has won an appeal in the Supreme Court over insurance cover provided by IAG New Zealand for a Christchurch building damaged in four successive earthquakes. More>>

ALSO:

Other Cases:

Royal Society: Review Finds Community Water Fluoridation Safe And Effective

A review of the scientific evidence for and against the efficacy and safety of fluoridation of public water supplies has found that the levels of fluoridation used in New Zealand create no health risks and provide protection against tooth decay. More>>

ALSO:

Scoop Business: Croxley Calls Time On NZ Production In Face Of Cheap Imports

Croxley Stationery, whose stationery brands include Olympic, Warwick and Collins, plans to cease manufacturing in New Zealand because it has struggled to compete with lower-cost imports in a market where the printed word is giving way to electronic communications. More>>

ALSO:

Prefu Roundup: Forecasts Revised, Surplus Intact

The National government heads into the election with its Budget surplus target broadly intact, delivering a set of economic and fiscal forecasts marginally revised from May to reflect weaker commodity prices and a lower tax take. More>>

ALSO:

Convention Centre: Major New SkyCity Hotel And Laneway For Auckland

Today SKYCITY Entertainment Group Limited revealed plans to build a new hotel and pedestrian laneway of bars, restaurants and boutique shopping on land it owns in the Nelson and Hobson Streets block, expanding the SKYCITY Entertainment Precinct. More>>

ALSO:

Get More From Scoop

 
 
Computer Power Plus

Standards New Zealand

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